SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                          Commission File No. 000-19235

                          SUMMIT FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

   SOUTH  CAROLINA                                                57-0892056
(State  or  other  jurisdiction                                        (I.R.S.
                                                                      Employer
   of  incorporation  or                                        Identification
                                                                          No.)
     organization)

                  P. O. Box 1087, 937 North Pleasantburg Drive
                        Greenville, South Carolina  29602
          (Address of Principal Executive Offices, including zip code)

                                 (864) 242-2265
              (Registrant's Telephone Number, Including Area Code)

           Securities Registered Pursuant to Section 12(b) of the Act:
                                      NONE

           Securities Registered Pursuant to Section 12(g) of the Act:
                 Title of Class:  COMMON STOCK, $1.00 PAR VALUE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  the  past  90  days.
YES   X     NO
    ---

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.          ______

The  aggregate  market  value  of  voting  and  nonvoting  common equity held by
non-affiliates  of  the Registrant computed by reference to the closing price of
such  stock  as  quoted  on the NASDAQ National Market, as of March 10, 2000 was
approximately  $22.1  million.  For  purposes of the foregoing calculation only,
all  directors  and  executive  officers  of  the  Registrant  have  been deemed
affiliates.

As  of  March  10,  2000, there were 3,393,700 shares of the Registrant's Common
Stock,  $1.00  par  value,  outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

(1)     Portions  of the Registrant's Definitive Proxy Statement for 2000 Annual
Meeting  of  Shareholders  is  incorporated  by  reference  in  Part  III.


<PAGE>
                                     PART I


NOTE  REGARDING  FORWARD-LOOKING  STATEMENTS
     Summit  Financial Corporation's ("the Company") Annual Report on Form 10-K,
specifically  certain  of  the  statements  set forth under "Item 1 - Business",
"Item  7  -  Management's  Discussion  and  Analysis  of Financial Condition and
Results  of  Operations",  "Item  7A  - Quantitative and Qualitative Disclosures
about  Market  Risk",  and  elsewhere  in  this  Form  10-K,  and  the documents
incorporated  herein  by  reference,  contains  forward-looking  statements,
identified  as  such  for purposes of the safe harbor provided in Section 27A of
the  Securities  Act  of  1933,  as  amended,  and Section 21E of the Securities
Exchange  Act of 1934, as amended.  Such forward-looking statements are based on
current  expectations,  estimates  and projections about the Company's industry,
management's  beliefs  and certain assumptions made by the Company's management.
Words  such  as  "anticipates",  "expects",  "intends",  "plans",  "believes",
"estimates",  or  variations of such words and similar expressions, are intended
to  identify  such  forward-looking  statements.  Readers are cautioned that any
such  forward-looking  statements  are  not guarantees of future performance and
involve  a  number  of  risks  and  uncertainties, and that actual results could
differ  materially  from  those  indicated  by  such forward-looking statements.
Important  factors  that  could  cause  actual results to differ materially from
those  indicated by such forward-looking statements include, but are not limited
to,  the following:  (1) that the information is of a preliminary nature and may
be  subject  to  further and/or continuing review and adjustment; (2) changes in
the  financial  industry  regulatory  environment; (3) changes in the economy in
areas served by the Company and its subsidiaries; (4) the impact of competition;
(5)  the  management  of  the  Company's  operations;  (6) changes in the market
interest  rate  environment  and/or the Federal Reserve's monetary policies; (7)
loan  prepayments  and  deposit  decay  rates;  and  (8)  the  other  risks  and
uncertainties  described  from  time  to  time in the Company's periodic reports
filed  with  the  SEC.  The  Company  disclaims  any  obligation  to  update any
forward-looking  statements.


ITEM  1.     BUSINESS

GENERAL
     Summit  Financial  Corporation  (the  "Company") was incorporated under the
laws  of the State of South Carolina on May 26, 1989. The Company, headquartered
in  Greenville,  South Carolina, is a bank holding company formed under the Bank
Holding Company Act of 1956, as amended.  Subsidiaries of the Company are Summit
National  Bank  (the  "Bank",  "Summit"), a national bank organized in 1990, and
Freedom  Finance,  Inc.  (the  "Finance Company", "Freedom"), a consumer finance
company  organized  in  1994.  In  1997  the Bank incorporated Summit Investment
Services,  Inc., an investment and financial planning company, as a wholly-owned
subsidiary.  The  Company  engages  in  no significant operations other than the
ownership  of  its  subsidiaries.  The  Company conducts its business from three
banking  offices  and eleven consumer finance offices throughout South Carolina.

     The  Bank  targets  individuals and small-to-medium-sized businesses in the
Upstate  of South Carolina that require a full range of quality banking services
typically  provided  by the larger regional banking concerns, but who prefer the
personalized service offered by a locally-based institution.  The Bank currently
has  its  headquarters  and  three  full-service branch locations in Greenville,
South  Carolina.  Summit  provides  a  full  range  of deposit services that are
typically  available  in  most banks and savings and loan associations including
checking  accounts,  NOW  accounts,  individual retirement accounts, savings and
other time deposits of various types ranging from daily money market accounts to
longer-term  certificates  of  deposit.  Deposits  of the Bank are insured up to
$100,000 by the Federal Deposit Insurance Corporation (the "FDIC").  The Company
has  no  material concentration of deposits from any single customer or group of
customers.  Other  services  which  the  Bank offers include safe deposit boxes,
bank money orders, wire transfer facilities, remote internet banking and various
cash  management  and  electronic  banking  programs.  Through Summit Investment
Services, Inc., the Bank provides a full range of nondeposit investment products
including  annuities and mutual funds, full and discount brokerage services, and
financial  management  services.

     The  Bank  also  offers a full range of short to intermediate-term, secured
and  unsecured  commercial  and  personal  loans for business, agriculture, real
estate,  home  improvement  and  automobiles,  credit  cards, letters of credit,
personal  investments  and home equity lines of credit.  It is the Bank's intent
to  originate  quality,  profitable loans which will benefit the area's economy,
provide  a  reasonable return to our shareholders, and promote the growth of the
Bank.  Management  strives  to  maintain  quality  in  the loan portfolio and to
accept only those credit risks which meet the Bank's underwriting standards.  No
significant  portion  of  the  Company's loan portfolio is concentrated within a
single  industry  or  group  of  related  industries.

     The  Finance  Company  makes  and services installment loans to individuals
with  loan  principal amounts generally not exceeding $2,000 and with maturities
ranging  from  three  to  eighteen  months.  The  Finance  Company,  which  is
headquartered  in  Greenville,  South  Carolina, currently has 11 branch offices
throughout  South  Carolina.  The Finance Company's loan customers are primarily
in  the  low-to-moderate  income  brackets  and  are  engaged  in widely diverse
occupations.  A  loan  investigation  and credit history review is made for each
borrower,  either  through  credit  reporting  agencies  or  directly by Company
employees.  Freedom  also makes available to borrowers credit life, accident and
health,  and  property  insurance directly related to the extension of credit to
the  individual.  The business of the Finance Company is rather seasonal and the
amount  of loans outstanding increases significantly at the end of each calendar
year  due  to  the seasonal loan demand, while the first quarter of the calendar
year  often  results  in  substantial  loan  paydowns.

     With  the  exception  of  the  loans  acquired  to  expand Freedom's branch
network, the Company has pursued a strategy of growth through internal expansion
since  its  inception.  At  December  31,  1999, the Company had total assets of
$191.2 million, total deposits of $158.0 million, loans, net of unearned income,
of $148.2 million and shareholders' equity of $17.6 million.  This compares with
total  assets  of  $170.5  million,  total  deposits of $140.2 million, loans of
$130.7  million  and shareholders' equity of $15.7 million at December 31, 1998.

     As  a  bank  holding  company,  the  Company is a legal entity separate and
distinct from its subsidiaries.  The Company coordinates the financial resources
of  the  consolidated  enterprise  and  maintains  financial,  operational  and
administrative  systems  that  allow  centralized  evaluation  of  subsidiary
operations  and coordination of selected policies and activities.  The Company's
operating revenues and net income are derived from its subsidiaries through fees
for  services  performed  and  interest  on  advances  and  loans.

TERRITORY  SERVED  AND  COMPETITION
     THE  BANK:  Summit  National  Bank  and  its  subsidiary, Summit Investment
Services,  Inc., are located in Greenville, South Carolina.  The extended market
area  encompasses  Greenville  County,  with the principal market area being the
urban  areas of Greenville County.  Greenville, South Carolina is located in the
fast  growing  Interstate-85  corridor  between  Charlotte,  North  Carolina and
Atlanta,  Georgia.  The  economy of Greenville is primarily industrial in nature
and the area is considered one of the Southeast's leading manufacturing centers.

     Greenville,  South  Carolina  is  a  highly  competitive commercial banking
market  in  which  all  of  the largest banks in the state are represented.  The
competition  among  the  various  financial  institutions is based upon interest
rates  offered  on deposit accounts, interest rates charged on loans, credit and
service  charges,  the  quality of services rendered, the convenience of banking
facilities,  and,  in  the case of loans to large commercial borrowers, relative
lending  limits.

     Many  of the competitor banks in the Bank's market area are subsidiaries of
bank  holding  companies  which  own banks in other southeastern states.  In the
conduct of certain areas of business, the Bank may also compete with savings and
loan associations, credit unions, insurance companies, securities firms, leasing
companies and other financial institutions, some of which are not subject to the
same  degree  of  regulation  and  restrictions  as the Bank.  The Bank may also
compete  with  out-of-state financial institutions which operate loan production
offices,  originate  mortgages,  accept money market deposits, and provide other
financial  services.  The  Bank's  investment  subsidiary  competes  with larger
brokerage houses and financial planners, discount brokers and internet brokerage
service  providers.

     Many  of these competitors have substantially greater resources and lending
abilities  due  to  their  size  than  the Bank or its subsidiary have and these
competitors  may  offer  services,  such  as  international  banking  and  trust
services,  that  the  Bank  is  not  currently providing.  Moreover, most of the
competitors have multiple branch networks located throughout the extended market
area,  while  the  Bank  currently  has  only  three locations, which could be a
competitive  disadvantage.  As  a result, the Bank does not generally attempt to
compete  for  the banking relationships of larger corporations, but concentrates
its  efforts  on small and medium-sized businesses and individuals.  The Company
believes  that the Bank is able to compete effectively in this market segment by
offering  competitive  pricing  of services and quality, experience and personal
treatment  in  the  execution  of  services.

     The  Bank  and its subsidiary are not dependent upon a single or a very few
customers,  the  loss  of  which  would  have  a  material  adverse  effect.

     THE  FINANCE  COMPANY:  Freedom  Finance,  Inc.  serves  its customers from
locations  in  Bishopville,  Columbia,  Conway, Florence, Greenville, Kingstree,
Lake  City,  Manning,  Moncks  Corner,  St.  George, and Sumter, South Carolina.
Competition  between  consumer  finance companies is not generally as intense as
that  among banks, however, this segment of the market has become over-served in
areas  of  South  Carolina.  The  amounts,  rates,  and fees charged on consumer
finance  loans  are  restricted  by  state  law according to the type of license
granted  by  the South Carolina State Board of Financial Institutions.  Numerous
other  finance  companies  which offer similar types of loans are located in the
areas  served  by  Freedom.

     The  Finance  Company  competes  directly with national, regional and local
consumer  finance  companies. The principal areas of competition in the consumer
finance  industry  are  convenience  of  services to customers, effectiveness of
advertising,  effectiveness  of administration of loans and the cost of borrowed
money.  Many  of  the  finance  companies  competing  with  Freedom  may  have
substantially  greater  resources and lending abilities than the Finance Company
and  may  have  more branches within the specific market areas in which they and
the  Finance  Company compete.  The Company believes that the Finance Company is
able  to  compete  effectively  in  its  current  markets.

EMPLOYEES
     As  of  December  31, 1999, the Company employed a total of three executive
officers.  Additionally, the Company and its subsidiaries employed approximately
74  full-time equivalent employees.  Management considers its relations with its
employees  to  be  good.

MONETARY  POLICY
     The  earnings  of  the  Company  and  it's  bank subsidiary may be affected
significantly  by  the  monetary  policies  of  the  Federal Reserve Board which
regulates  the  money  supply in order to mitigate recessionary and inflationary
pressures.  Among  the  techniques  used  to implement these objectives are open
market  operations  in United States Government securities, changes in the rates
paid  by  banks  on bank borrowings, changes in the reserve requirements against
bank  deposits and limitations on interest rates which banks may pay on time and
savings  deposits.  These  techniques  are  used  in  varying  combinations  to
influence  overall  growth  and  distribution  of  bank  loans,  investments and
deposits,  and their use may also affect interest rates charged on loans or paid
on  deposits.

IMPACT  OF  INFLATION
     Unlike  most  industrial companies, the assets and liabilities of financial
institutions such as the Company's subsidiary, are primarily monetary in nature.
Therefore,  the  Company's  performance is not generally affected by the general
levels  of  inflation  on  the price of goods and services.  While the Company's
noninterest  income  and  expense  and  the  interest  rates earned and paid are
affected  by  the  rate  of  inflation, the Company believes that the effects of
inflation  are  generally  manageable  through  asset/liability  management.

ACCOUNTING  ISSUES
     In  June  1998,  the  Financial  Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  133,  "Accounting for
Derivative  Instruments  and Hedging Activities."  SFAS 133 changes the previous
accounting definition of a derivative and discusses the appropriateness of hedge
accounting  for  various  forms of hedging activities.  Under this standard, all
derivatives  are  measured  at  fair  value  and  recognized in the statement of
financial  position as assets or liabilities.  This standard, as amended by SFAS
137,  is  effective  for all fiscal quarters of all fiscal years beginning after
June 15, 2000, with earlier adoption permitted.  Management does not expect that
this  standard  will  have  a  significant  effect  on  the  Company.

SUPERVISION  AND  REGULATION
     GENERAL:  The  Company and its subsidiaries are extensively regulated under
federal  and  state  law.  These  laws and regulations are primarily intended to
protect consumer borrowers and depositors, not shareholders.  To the extent that
the  following  information  describes statutory or regulatory provisions, it is
qualified  in  its  entirety  by  reference  to  the  particular  statutes  and
regulations.  Any  change  in  the applicable laws may have a material effect on
the  business and prospects of the Company.  The operation of the Company may be
affected  by  legislative and regulatory changes and by the monetary policies of
various  regulatory  authorities.  The  Federal Reserve examines the Company and
may  examine  the  Bank  and  Finance  Company.

     THE  COMPANY:  The  Company is a bank holding company within the meaning of
the  Bank  Holding Company Act of 1956, as amended (the "BHCA"), and as such, is
under  the supervisory and regulatory authority of the Board of Governors of the
Federal  Reserve  System  (the  "Federal  Reserve").  As  a bank holding company
registered  under  the  laws of the South Carolina Bank Holding Company Act, the
Company  is  also  subject  to  regulation  by  the  State  Board  of  Financial
Institutions.  Consequently,  the Company must receive the approval of the State
Board prior to engaging in the acquisition of banking or nonbanking institutions
or  assets.  The  Company  is  also  required  to  file annual reports and other
information  with  the  Federal  Reserve  and  the South Carolina State Board of
Financial Institutions regarding its financial condition, results of operations,
management  and  intercompany relationships and transactions between the Company
and  its  subsidiaries.   The  BHCA requires prior Federal Reserve approval for,
among  other  things,  the  acquisition  by  a bank holding company of direct or
indirect  ownership  or  control  of  more  than  5%  of  the  voting  shares or
substantially all of the assets of any bank, or for a merger or consolidation of
a  bank  holding  company  with  another  bank  holding  company.

     In  November  1999,  Congress  passed  the  "Gramm-Leach-Bliley"  Financial
Services  Modernization  Act (the "GLB Act") which repeals two provisions of the
Glass-Stegall  Act  that  have  previously  separated  banking,  insurance,  and
securities  activities.  The GLB Act creates a new financial services structure,
the financial holding company, under the BHCA.  Financial holding companies will
be  able  to  engage  in  any  activity  that  is  deemed "financial in nature".
Accordingly,  the Company and its bank subsidiary will be able to affiliate with
securities  firms,  insurance companies and other financial-related companies as
well  as  consider  new  products  and  services  including merchant banking and
securities underwriting, within the same financial holding company.  In addition
to  broadening  the  range  of  financial  company  affiliations and products or
services  the  Company  may  offer,  other provisions of the GLB Act include new
consumer  privacy provisions; changes in the Federal Home Loan Bank System as to
entry  and  collateral  on  advances;  and  a  reduction in the frequency of CRA
examinations  for  banks  under $250 million in assets and with a "satisfactory"
rating.

     The  GLB  Act  adopts  a  system of functional regulation where the primary
regulator  is  determined  by the nature of the activity rather than the type of
institution.  Although  the  Federal  Reserve  Board (the "FRB") is the umbrella
supervisor of financial holding companies, the GLB Act limits the FRB's power to
supervise  and  conduct  examinations  of  affiliated companies of the financial
holding  company.  Rather,  under  the provisions of the GLB Act, the securities
activities  would  be  regulated  by  the  SEC  and other securities regulators,
insurance  activities by the state insurance authorities, and banking activities
by  the  appropriate  bank  regulator.

     Under  the  policy  of  the  Federal  Reserve  with respect to bank holding
company  operations,  a bank holding company is required to serve as a source of
financial  strength  to  its  subsidiary  depository  institutions and to commit
resources to support such institutions in circumstances where it might not do so
absent  such  policy.  The Federal Deposit Insurance Corporation Improvement Act
of  1991  ("FDICIA"),  requires  that  a bank holding company guarantee that any
"undercapitalized"  (as  defined  in the statute) insured depository institution
subsidiary  will  comply with the terms of any capital restoration plan filed by
such  subsidiary with its appropriate federal banking agency up to the lesser of
(i)  an  amount  equal  to  5% of the institution's total assets at the time the
institution  became  undercapitalized,  or (ii) the amount that is necessary (or
would be necessary) to bring the institution into compliance with all applicable
capital  standards  as  of  the  time  the institution fails to comply with such
capital  restoration  plan.

     Under  Section  5(e)  of the BHCA, the Federal Reserve has the authority to
terminate any activity of a bank holding company that constitutes a serious risk
to the financial soundness or stability of any subsidiary depository institution
or  to terminate its control of such subsidiary.  Further, FDICIA grants federal
bank  regulatory  authorities  additional  discretion  to require a bank holding
company  to  devest  itself  of  any  bank  or  nonbank subsidiary if the agency
determines  that  divesture  may  aid  the  depository  institution's  financial
condition.

     In  July  1996,  South  Carolina  enacted  the  South  Carolina Banking and
Branching  Efficiency  Act  (the "Act") which provides that, except as otherwise
expressly permitted by federal law and in limited circumstances specified in the
Act, a company may not acquire a South Carolina bank holding company (as defined
in  the  Act)  or  a  bank chartered under the laws of South Carolina unless the
company  obtains  prior  approval from the State Board of Financial Institutions
(the  "State  Board").  The  company proposing to make the acquisition must file
with  the  State  Board  a notice or application that the company filed with the
responsible  federal bank supervisory agency and pay the fee, if any, prescribed
by  the  State Board.  In addition, the company must publish prior notice of the
application  once  in a daily newspaper of general circulation in South Carolina
and provide an opportunity for public comment.  If the company proposing to make
the  acquisition  is an out-of-state bank holding company, it must qualify to do
business  in  South Carolina or appoint an agent for service of process in South
Carolina.  The  Act  also  provides  that  approval  of  the State Board must be
obtained before an interstate bank merger involving a South Carolina bank may be
consummated.

     The  passage of the Riegle-Neal Interstate Banking and Branching Efficiency
Act  of  1994  (the "Riegle-Neal Act") has increased the ability of bank holding
companies  and  banks to operate across state lines.  Under the Riegle-Neal Act,
with  the  approval of the Board of Governors of the Federal Reserve System, and
subject  to  nationwide  and statewide concentration limits, the Company and any
other bank holding company located in South Carolina may acquire or merge with a
bank  located  in  any other state and a bank holding company located outside of
South Carolina may acquire or merge with any South Carolina-based bank, provided
the acquirer is adequately capitalized and adequately managed, as defined in the
Riegle-Neal  Act.  The  Interstate  Banking  Act  also permits de novo branching
provisions.  The  legislation preserves the state laws which require that a bank
must be in existence for a minimum period of time before being acquired, as long
as  the  requirement  is  five  years  or  less.

     The Company is an "affiliate" of the Bank within the meaning of the Federal
Reserve  Act, which imposes restrictions on loans by the Bank to the Company, on
investments  by  the  Bank in the stock or securities of the Company, and on the
use  of  such  stock  or  securities  as collateral for loans by the Bank to any
borrower.  The  Company  and  the Bank are subject to Section 23A of the Federal
Reserve  Act.  Section  23A  defines  "covered  transactions",  which  includes
extensions  of  credit,  and  limits  a  bank's  covered  transactions  with any
affiliate  to  10% of such bank's capital and surplus.  All covered transactions
with  all  affiliates cannot in the aggregate exceed 20% of a bank's capital and
surplus.  All  covered and exempt transactions between a bank and its affiliates
must  be  on  terms  and  conditions  consistent  with  safe  and  sound banking
practices,  and  banks  and  their  subsidiaries  are prohibited from purchasing
low-quality  assets  from  the bank's affiliates.  Finally, Section 23A requires
that  all  of  a  bank's  extensions  of credit to an affiliate be appropriately
secured  by  acceptable  and  adequate collateral, as defined in the regulation.
The  Company and the Bank are also subject to Section 23B of the Federal Reserve
Act,  which  generally limits covered and other transactions among affiliates to
terms  and circumstances, including credit standards, that are substantially the
same  or at least as favorable to a bank holding company, a bank or a subsidiary
of  either  as  prevailing  at  the  time  for  transactions  with  unaffiliated
companies.

     THE  BANK:  The  Company's  subsidiary  bank,  Summit  National  Bank, is a
nationally  chartered  financial institution, and as such, is subject to various
statutory  requirements,  supervision  and  regulation,  of  which  regular bank
examinations are a part, promulgated and enforced primarily by the Office of the
Comptroller  of  the  Currency  (the  "Comptroller").  These statutes, rules and
regulations  relate  to  insurance  of  deposits,  required  reserves, allowable
investments,  loans, mergers, consolidations, issuance of securities, payment of
dividends,  establishment  of  branches,  and  other  aspects of the business of
Summit  National  Bank.

     The  Comptroller  is responsible for overseeing the affairs of all national
banks  and  periodically  examines  national banks to determine their compliance
with  law  and  regulations.  The  Comptroller  monitors all areas of the Bank's
operations,  including  loans,  mortgages,  issuance  of  securities,  capital
adequacy,  risk management, payment of dividends, and establishment of branches.
In  addition,  the  Comptroller  has  authority to issue cease and desist orders
against  national  banks  which are engaged in unsafe or unsound practice in the
conduct  of  their  business.  Federal banking laws applicable to all depository
financial  institutions,  among other things, (i) afford federal bank regulatory
agencies  with  powers  to  prevent  unsafe  and unsound banking practices; (ii)
restrict preferential loans by banks to "insiders" of banks; (iii) require banks
to  keep  information on loans to major shareholders and executive officers, and
(iv) bar certain director and officer interlocks between financial institutions.

     The  Comptroller  also administers a number of federal statutes which apply
to  national banks such as the Depository Institution Management Interlocks Act,
the International Lending Supervision Act of 1983 and the Community Reinvestment
Act  of  1977 ("CRA").  CRA requires that, in connection with their examinations
of financial institutions, the Comptroller shall evaluate the record of the Bank
in  meeting  the credit needs of the local community, including low and moderate
income  neighborhoods, consistent with the safe and sound operation of the Bank.
These  factors  are  also  considered  in  evaluating mergers, acquisitions, and
applications to open a branch facility.  The federal banking agencies, including
the  Comptroller, issued a new joint rule which became effective for the Bank in
1997  related  to  evaluating  an  institution's  CRA performance.  The new rule
evaluates  institutions  based on their actual performance (rather than efforts)
in  meeting  community  credit  needs.  Subject  to  certain  exceptions,  the
Comptroller  assesses  the  CRA  performance  of  a  bank  by  applying lending,
investment, and service tests.  The Comptroller assigns a rating to a bank based
on  the  bank's  performance  under  the tests.  To evaluate compliance with the
lending,  investment and service tests, subject to certain exceptions, banks are
required to collect and report to the Comptroller extensive demographic and loan
data.  Summit  National Bank received a "satisfactory" rating in its most recent
CRA  examination.

     The  Bank  is  a  member  of the Federal Home Loan Bank of Atlanta ("FHLB")
which  provides  a  central  credit  facility primarily for member institutions.
Members of the FHLB are required to acquire and hold shares of capital stock in,
and  may  obtain advances from, the FHLB.  The amount of stock owned is based on
the  Bank's  balance  of  residential  mortgages  and the balance of outstanding
advances  from  the FHLB.  The FHLB makes advances to members in accordance with
policies  and  procedures  established  by  its Board of Directors.  The Bank is
authorized  to  borrow  funds  from  the FHLB to meet demands for withdrawals of
deposit  accounts,  to meet seasonal requirements, to fund expansion of the loan
portfolio, or for general asset/liability management.  Advances may be made on a
secured  or  unsecured  basis  depending  on  a number of factors, including the
purpose  for  which  the  funds  are  being  borrowed  and  existing  advances.
Collateral  on  secured  advances  may  be in the form of first mortgages on 1-4
family  real  estate,  government  securities, or other assets acceptable to the
FHLB.  Interest  rates  charged  for  advances vary depending upon maturity, the
cost  of  funds  to  the  FHLB,  and  general  market  conditions.

     The Bank is also a member of the FDIC, which currently insures the deposits
of  each  member  bank  to  a  maximum  of  $100,000  per  depositor.  For  this
protection,  each  bank pays a semiannual statutory assessment and is subject to
the  rules  and  regulations  of  the  FDIC.  Further, the FDIC is authorized to
impose  one or more special assessments in any amount deemed necessary to enable
repayment  of  amounts borrowed by the FDIC from the United Stated Department of
the  Treasury.  The  FDIC  has  broad authority to prohibit Summit National Bank
from  engaging  in unsafe or unsound banking practices and may remove or suspend
officers  or  directors  of  a bank to protect its soundness.  The FDIC requires
insured banks to maintain specified levels of capital, maintain certain security
devices  and  procedures  and  to  file  quarterly reports and other information
regarding  its  operations.  The  FDIC  requires  assessment  to be paid by each
FDIC-insured  institution  based  on  the  institution's  assessment  risk
classification,  which  is  determined  based  on  whether  the  institution  is
considered  "well capitalized", "adequately capitalized", or "undercapitalized",
as  terms  have  been  defined  in  applicable  federal  regulations  adopted to
implement  the  prompt  corrective  action  provisions  of  the  Federal Deposit
Insurance  Corporation  Improvement Act ("FDICIA"), and whether such institution
is  considered  by  its  supervisory  agency  to be financially sound or to have
supervisory  concerns.

     FDICIA  also  contains  broad powers for federal banking regulators to take
certain  enforcement  actions  against  problem institutions as well as imposing
significant  restrictions  on undercapitalized financial institutions, including
establishing  a  capital-based  supervisory  system for prompt corrective action
("PCA").  Under  the  PCA provisions, regulatory agencies can require submission
and  funding  of  a capital restoration plan by an undercapitalized institution,
place  limits  on its activities, require the raising of additional capital, and
can  ultimately  require  the  appointment  of  a conservator or receivor of the
institution  if  deemed  necessary  and  prudent  by  the  regulatory  agency.

     Interest  and certain other charges collected or contracted for by the Bank
is  subject  to  state  usury  laws and certain federal laws concerning interest
rates.  The  Bank's  operations  are  also  subject  to  certain  federal  laws
applicable  to  credit  transactions,  such  as the federal Truth-In-Lending Act
governing  disclosures  of  credit  terms  to  consumer borrowers; CRA requiring
financial institutions to meet their obligations to provide for the total credit
needs  of  the  community;  the  Home  Mortgage Disclosure Act of 1975 requiring
financial  institutions to provide information to enable the public to determine
whether  it  is  fulfilling  its  obligation  to  meet  the housing needs of the
community it serves; the Equal Credit Opportunity Act prohibiting discrimination
on  the  basis  of race, creed, or other prohibited factors in extending credit;
the  Fair  Credit  Reporting  Act  of  1978  governing the use and provisions of
information to credit reporting agencies; the Fair Debt Collection Act governing
the  manner  in  which  consumer  debts  may  be  collected;  and  the rules and
regulations  of  the various federal agencies charged with the responsibility of
implementing  such  federal  laws.

     The  deposit  operations  of  the  Bank  are  also  subject to the Right to
Financial  Privacy  Act  which  imposes  a  duty  to maintain confidentiality of
consumer  financial  records  and  prescribes  procedures  for  complying  with
administrative subpoenas of financial records, and the Electronic Funds Transfer
Act  and  Regulation E issued by the Federal Reserve to implement that act which
governs  automatic  deposits  to  and  withdrawals  from  deposit  accounts  and
customers'  rights  and  liabilities  arising  from  the use of automated teller
machines  and  other  electronic  banking  services.

     THE  FINANCE  COMPANY:  The  Company's  subsidiary finance company, Freedom
Finance, Inc., is a consumer finance company licensed and regulated by the State
Board  of  Financial  Institutions for South Carolina.  Accordingly, the Finance
Company  is  subject  to  annual  examinations  by  the  State Board and various
regulatory requirements, including annual reporting, annual license renewal, and
other  regulations  pertaining  to the extension of credit.  Specifically, state
laws  and  regulations  apply to maximum loan amounts, terms, interest rates and
credit  insurance and other fee charges.  These laws and regulations are subject
to  both  repeal  and revision from time to time, often in response to pressures
exerted  by  consumer  rights  groups.

CAPITAL  REQUIREMENTS
     Pursuant to the general supervisory authority conferred by the BHCA and the
directives  set  forth in the International Lending Supervision Act of 1983, the
Federal  Reserve  and  Comptroller  have  adopted  risk-based  capital  adequacy
guidelines for banks and bank holding companies subject to their regulation as a
means  for  determining  the  adequacy of capital based on the risks inherent in
carrying various classes of assets and off-balance sheet items.  Failure to meet
minimum  capital  requirements  can  initiate  certain  mandatory  and  possibly
additional discretionary actions by regulators that, if undertaken, could have a
material  effect on the financial statements.  Under capital adequacy guidelines
and  the  regulatory framework for prompt corrective action, the Company and the
Bank must meet specific capital guidelines that involve quantitative measures of
the  Company's  and the Bank's assets, liabilities and certain off-balance sheet
items  as  calculated  under regulatory accounting practices.  The Company's and
the  Bank's  capital  amounts and classification are also subject to qualitative
judgments  by  the  regulators  about  components,  risk  weightings,  and other
factors.

     Quantitative  measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and ratios of total
and  Tier  I  capital (as defined in the regulation) to risk-weighted assets (as
defined)  and  to  total  assets.  Management believes, as of December 31, 1999,
that  the  Company  and the Bank meet all capital adequacy requirements to which
they  are  subject.  At  December  31, 1999 and 1998, the Bank is categorized as
"well  capitalized" under the regulatory framework for prompt corrective action.
To  be  categorized  as "well capitalized", the Bank must maintain minimum total
risk-based,  Tier I risk-based and Tier I leverage ratios.  There are no current
conditions  or events that management believes would change the Company's or the
Bank's  category.

     The  Company's and the Bank's actual capital amounts and ratios at December
31,  1999 and 1998 as well as the minimum calculated amounts for each regulatory
defined  category  are included in this report under Part II, Item 8. "Financial
Statements  and  Supplemental  Data"  as  Note  14  to the Notes to Consolidated
Financial  Statements.

DIVIDENDS
     The  holders  of  the  Company's  common stock are entitled to receive cash
dividends  when  and  if  declared  by  the  Board of Directors out of the funds
legally available therefor.  The Company is a legal entity separate and distinct
from  its  subsidiaries  and  depends  in large part for its income available to
distribute  to  shareholders  on  the  payment  of  cash  dividends  from  its
subsidiaries.  While  the  Company  is  not  presently subject to any regulatory
restrictions  on dividends, the Bank is subject to such regulatory cash dividend
restrictions.

     Specifically,  approval of the Comptroller of the Currency will be required
for  any cash dividend to be paid to the Company by the Bank if the total of all
cash  dividends,  including  any proposed cash dividend, declared by the Bank in
any  calendar  year  exceeds the total of its net profits for that year combined
with  its  retained  net  profits for the preceding two years, less any required
transfers  to  surplus.  Additionally,  the  National  Bank  Act provides that a
national  bank  cannot pay cash dividends or other distributions to shareholders
out  of  any  portion of its common stock or preferred stock accounts and that a
bank  shall  pay no cash dividend in an amount greater than its net profits then
on  hand, after deduction of its losses and bad debts.  As of December 31, 1999,
no cash dividends have been declared or paid by the Bank.  At December 31, 1999,
the  Bank  had  available  retained  earnings  of  $7.5  million.

     On  November  29, 1999, the Company issued its eighth 5% stock distribution
in  the  form  of  a stock dividend to shareholders of record as of November 18,
1999.  This dividend resulted in the issuance of 153,822 shares of the Company's
$1.00  par  value  common  stock.

SELECTED  STATISTICAL  FINANCIAL  INFORMATION
     The  Company,  through  the  operations of the Bank, offers a wide range of
financial  related  services to individual and corporate customers.  The Bank is
subject  to  competition  from  other  financial institutions.  The Bank is also
subject  to  the  regulations of certain federal agencies and undergoes periodic
examinations  by  those  regulatory  authorities.  The  Company  has  no foreign
operations.

     The  consolidated  financial  statements  of  the  Company  are prepared in
conformity  with  generally  accepted  accounting  principles.  In preparing the
consolidated  financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of the
date  of  the  balance  sheet  and  revenues  and  expenses  for the period. The
consolidated selected statistical financial data provided on the following pages
presents  a  more  detailed  review  of  the  Company's  business  activities.

<PAGE>


NET  INTEREST  INCOME  ANALYSIS
-------------------------------
     Net  interest  income, the difference between the interest earned on assets
and  the  interest  paid  for  liabilities  used to support those assets, is the
principal  source  of  the  Company's operating income.  Net interest income was
$8.7  million,  $7.6  million,  and  $7.0  million  for  1999,  1998,  and 1997,
respectively.  The  Company's  average interest rate spread is calculated as the
difference  between  the average interest rate earned on interest-earning assets
and  the  average  interest  paid  on interest-bearing liabilities.  This spread
increased between 1998 and 1999 because of the reduction in the cost of funds of
the  Company  due  to  the  maturities  of  higher  priced CDs combined with the
restructure  of  the deposit portfolio to lower costing, variable rate deposits.
The  spread  remained relatively constant between 1997 and 1998 as the reduction
in rates on interest-earning assets was offset by a decline in the rates paid on
interest-bearing  liabilities.  The  increase  in net interest income in 1999 is
directly  related  to the increase in the average loan and deposit volume of the
Bank  of  15% and 7%, respectively, combined with the 36 basis point increase in
net interest margin during the year.  Net interest income increased in 1998 also
related  to  the higher average loan and deposit volume of the Bank which was up
from  1997  by  9%  and  10%,  respectively.

     For the year ended December 31, 1999, the Company's net interest margin was
5.31%, compared to 4.95% in 1998 and 4.94% for 1997.  The net interest margin is
calculated as net interest income divided by average earning assets.  The margin
for  1999  increased  36  basis  points from the prior year due primarily to the
reduction  in  the  cost  of  funds  as  CDs  with higher rates matured and were
replaced  with  lower  market  rate deposits.  The higher percentage of variable
rate  deposits  also  contributed  to  the  lower cost of funds as deposits were
repricing  immediately  in  the  declining  rate  period  between  late 1998 and
mid-year  1999.  The  margins between 1998 and 1997 remained fairly constant due
to  the  lower cost of funds in 1998 which offset the declining rate environment
experienced  in  the  fourth  quarter  of  1998  and resulted in lower yields on
assets.

     The  Company  manages  interest  rate spreads by monitoring the maturity of
assets  and  related  liabilities,  interest  rates,  risk  exposure, liquidity,
funding  sources, and capital resources.  The objective of such monitoring is to
maximize  net interest income over an extended period of time, while maintaining
associated  risk  within  prescribed  policy  limits.

     The  following  table  presents the average balances, the average yield and
the  interest income earned on interest-earning assets, and the average rate and
the  interest paid or accrued on interest-bearing liabilities of the Company for
the  last  three  years.  Also  presented  is  the  average yields and rates for
interest-earning  assets  and interest-bearing liabilities at December 31, 1999.
Tabular presentation of all average statistical data is based on daily averages.

<PAGE>


<TABLE>
<CAPTION>


                                     AVERAGE BALANCES AND NET INTEREST INCOME ANALYSIS
                                                   (DOLLARS IN THOUSANDS)


                                           12/31/99      1999      1999     1999      1998      1998      1998      1997
                                          -----------  --------  --------  -------  --------  ---------  -------  ---------
                                            Average    Average   Income/   Yield/   Average    Income/   Yield/    Average
                                          Yield/Rate   Balance   Expense    Rate    Balance    Expense    Rate     Balance
                                          -----------  --------  --------  -------  --------  ---------  -------  ---------
<S>                                       <C>          <C>       <C>       <C>      <C>       <C>        <C>      <C>
ASSETS
Earning Assets:
Loans (net of unearned income) (1)             10.06%  $138,989  $ 13,676    9.84%  $120,455  $ 12,275    10.19%  $110,812
Investment securities (taxable)                 6.28%    16,038       951    5.93%    19,168     1,155     6.02%    18,597
Investment securities
(non-taxable) (2)                               7.56%    10,113       500    7.50%     8,365       413     7.49%     2,705
Investment in stock (3)                         4.58%       888        61    6.87%       771        50     6.48%       685
Federal funds sold                              5.52%     2,015       102    5.06%     7,242       397     5.48%     7,542
Interest-bearing bank balances                  5.33%     1,631        87    5.33%     2,047       126     6.15%     2,220
                                          -----------  --------  --------  -------  --------  ---------  -------  ---------
     Total earning assets                       9.41%   169,674  $ 15,377    9.21%   158,048  $ 14,416     9.26%   142,561
                                          ===========            ========  =======            =========  =======
Non-earning assets                                       10,467                        8,379                         7,101
                                                       --------                     --------                      ---------
     Total average assets                              $180,141                     $166,427                      $149,662
                                                       ========                     ========                      =========
LIABILITIES &
SHAREHOLDERS'
EQUITY
Liabilities:
Interest-bearing deposits:
  Interest checking                             3.15%  $ 10,409  $    251    2.41%  $  6,931  $    155     2.24%  $  6,793
  Savings                                       2.43%     1,758        43    2.45%     1,643        42     2.56%     1,532
  Money market accounts                         4.64%    55,667     2,450    4.40%    44,214     2,058     4.65%    31,873
  Time deposits greater than $100M              5.28%    20,869     1,074    5.15%    25,316     1,445     5.71%    27,872
  Other time deposits                           5.23%    43,765     2,268    5.18%    47,793     2,731     5.72%    48,958
                                          -----------  --------  --------  -------  --------  ---------  -------  ---------
     Total interest-bearing deposits            4.77%   132,468     6,086    4.59%   125,897     6,431     5.11%   117,028
Federal funds purchased
 and repurchase agreements                      5.25%       909        46    5.06%       836        43     5.14%       789
Other short-term borrowings                     6.59%       510        33    6.47%     1,053        71     6.74%       776
FHLB advances                                   5.39%     8,530       463    5.42%     4,517       257     5.67%     2,607
                                          -----------  --------  --------  -------  --------  ---------  -------  ---------
     Total interest-bearing liabilities         4.82%   142,417  $  6,628    4.65%   132,303  $  6,802     5.14%   121,200
                                          ===========            ========  =======            =========  =======
Noninterest bearing liabilities:
  Noninterest bearing deposits                           19,204                       17,497         -        -     14,222
  Other noninterest bearing liabilities                   1,849                        2,203         -        -      1,740
                                                       --------                     --------                      ---------
     Total liabilities                                  163,470                      152,003         -        -    137,162
Shareholders' equity                                     16,671                       14,424         -        -     12,500
                                                       --------                     --------                      ---------
     Total average liabilities
       and equity                                      $180,141                     $166,427         -        -   $149,662
                                                       ========                     ========                      =========
Net interest margin (4)                                          $  8,749    5.31%            $  7,614     4.95%
                                                                 ========  =======            =========  =======
Interest rate spread (5)                                                     4.56%                         4.12%
                                                                           =======                     =========



                                            1997     1997
                                          --------  -------
                                          Income/   Yield/
                                          Expense    Rate
                                          --------  -------
<S>                                       <C>       <C>
ASSETS
Earning Assets:
Loans (net of unearned income) (1)        $ 11,491   10.37%
Investment securities (taxable)              1,173    6.31%
Investment securities
(non-taxable) (2)                              135    7.56%
Investment in stock (3)                         45    6.57%
Federal funds sold                             410    5.44%
Interest-bearing bank balances                 127    5.72%
                                          --------  -------
     Total earning assets                 $ 13,381    9.43%
                                          ========  =======
Non-earning assets

     Total average assets

LIABILITIES &
SHAREHOLDERS'
EQUITY
Liabilities:
Interest-bearing deposits:
  Interest checking                       $    171    2.52%
  Savings                                       43    2.81%
  Money market accounts                      1,451    4.55%
  Time deposits greater than $100M           1,616    5.80%
  Other time deposits                        2,859    5.84%
                                          --------  -------
     Total interest-bearing deposits         6,140    5.25%
Federal funds purchased
 and repurchase agreements                      42    5.32%
Other short-term borrowings                     52    6.70%
FHLB advances                                  170    6.52%
                                          --------  -------
     Total interest-bearing liabilities   $  6,404    5.28%
                                          ========  =======
Noninterest bearing liabilities:
  Noninterest bearing deposits
  Other noninterest bearing liabilities

     Total liabilities
Shareholders' equity

     Total average liabilities
And equity                                       -

Net interest margin (4)                   $  6,977    4.94%
                                          ========  =======
Interest rate spread (5)                              4.15%
                                                    =======

<FN>


(1)     Average  loans  includes  nonaccruing  loans.
(2)     Yields on nontaxable investment securities have been adjusted to a tax equivalent basis assuming a 34% Federal
tax  rate.
(3)     Includes  investments  in  stock  of  Federal  Reserve  Bank,  Federal  Home  Loan  Bank,  and  other  equities.
(4)     Net  interest margin is computed by dividing net interest income (adjusted to a tax equivalent basis assuming a 34%
Federal  tax  rate)  by  total  average  interest-earning  assets.
(5)     Interest rate spread is the difference between the average yield on interest-earning assets and the average rate on
interest-bearing  liabilities.

</TABLE>


<PAGE>

ANALYSIS  OF  CHANGES  IN  INTEREST  DIFFERENTIAL
-------------------------------------------------
     Net  interest income ("NII") is affected by changes in the average interest
rate  earned  on  interest-earning  assets and the average interest rate paid on
interest-bearing  liabilities.  In  addition, net interest income is affected by
changes  in  the  volume  of  interest-earning  assets  and  interest-bearing
liabilities.  The  following  table  sets forth the dollar amount of increase in
interest  income  and  interest  expense resulting from changes in the volume of
interest-earning  assets  and  interest-bearing  liabilities and from changes in
yields  and rates.  For the purposes of this table, changes which are not solely
attributable  to  volume  or  rate  have  been  attributed  to  rate.

<TABLE>
<CAPTION>



                                      VOLUME AND RATE VARIANCE ANALYSIS
                                            (DOLLARS IN THOUSANDS)

                                                    1998 - 1999                      1997 - 1998
                                         ------------------------------    ---------------------------

                                           CHANGE RELATED TO       TOTAL    CHANGE RELATED TO     TOTAL
                                         ---------------------    CHANGE  ---------------------   CHANGE
                                            Volume       Rate     IN NII     Volume       Rate    IN NII
                                         -------------  ------    ------  -------------  ------   ------
<S>                                      <C>            <C>     <C>       <C>            <C>     <C>
Earning assets:
Loans (net of unearned income)           $      1,889   ($488)  $ 1,401   $      1,000   ($216)  $   784
Investment securities (taxable)                  (189)    (15)     (204)            36     (54)      (18)
Investment securities (non-taxable)                86       1        87            428    (150)      278
Investment in stock                                 8       3        11              6      (1)        5
Federal funds sold                               (287)     (8)     (295)           (16)      3       (13)
Interest-bearing bank balances                    (26)    (13)      (39)           (10)      9        (1)
                                         -------------  ------  --------  -------------  ------  --------
Total interest income                           1,481    (520)      961          1,444    (409)    1,035
                                         -------------  ------  --------  -------------  ------  --------
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking                                  78      18        96              3     (19)      (16)
Savings                                             3      (2)        1              3      (4)       (1)
Money market accounts                             533    (141)      392            562      45       607
Time deposits greater than $100M                 (254)   (117)     (371)          (148)    (23)     (171)
Other time deposits                              (230)   (233)     (463)           (68)    (60)     (128)
                                         -------------  ------  --------  -------------  ------  --------
Total interest-bearing deposits                   130    (475)     (345)           352     (61)      291
Federal funds purchased and repurchase
 agreements                                         4      (1)        3              2      (1)        1
Other short-term borrowings                       (35)     (3)      (38)            18       1        19
FHLB advances                                     228     (22)      206            126     (39)       87
                                         -------------  ------  --------  -------------  ------  --------
Total interest expense                            327    (501)     (174)           498    (100)      398
                                         -------------  ------  --------  -------------  ------  --------
Net interest differential                $      1,154    ($19)  $ 1,135   $        946   ($309)  $   637
                                         =============  ======  ========  =============  ======  ========

</TABLE>

INTEREST  RATE  SENSITIVITY  ANALYSIS
-------------------------------------
     An  important  aspect of achieving satisfactory levels of net income is the
management  of  the  composition  and  maturities  of  rate sensitive assets and
liabilities in order to optimize net interest income as interest rates earned on
assets  and  paid  on  liabilities  fluctuate  from  time to time.  The interest
sensitivity  gap  (the "gap") is the difference between total interest sensitive
assets  and  liabilities in a given time period.  The gap provides an indication
of  the  extent  to  which  the Company's net interest income may be affected by
interest  rate  movements.

     The  objective of interest sensitivity management is to maintain reasonably
stable growth in net interest income despite changes in market interest rates by
maintaining  the  proper  mix  of  interest  sensitive  assets  and liabilities.
Management  seeks  to  maintain a general equilibrium between interest sensitive
assets and liabilities in order to insulate net interest income from significant
adverse  changes  in  market  rates.

     At  December  31,  1999,  on  a  cumulative  basis  through  12  months,
rate-sensitive liabilities exceed rate-sensitive assets, resulting in a 12 month
period  liability  sensitive position at the end of 1999 of $27.5 million.  When
the effective change ratio (the historical relative movement of each asset's and
liability's  rates in relation to a 100 basis point change in the prime rate) is
applied  to  the  interest  gap  position,  the  Company is actually in an asset
sensitive  position over a 12 month period and the entire repricing lives of the
assets  and  liabilities.  This  is primarily due to the fact that approximately
62%  of the loan portfolio moves immediately on a one-to-one ratio with a change
in  the  prime  rate,  while the deposit accounts do not increase or decrease as
much  relative  to  a  prime  rate  movement.

     The  following  table  presents  a measure, in a number of time frames, the
interest  sensitivity  gap  by  subtracting  interest-sensitive liabilities from
interest-sensitive  assets.


<TABLE>
<CAPTION>

                             INTEREST SENSITIVITY ANALYSIS
                                 (DOLLARS IN THOUSANDS)

                                              As of December 31, 1999
                                      Assets and Liabilities Repricing Within
                                      ---------------------------------------
                                      3 Months    4 to 12    1 to 5   Over 5
                                       or Less     Months     Years    Years    Total
                                      ---------  ----------  -------  -------  --------
<S>                                   <C>        <C>         <C>      <C>      <C>
Interest-earning assets:
Loans (net of unearned income)        $  93,906  $   5,919   $46,180  $ 2,165  $148,170
Investments  (1)                          1,326      1,782    10,735   13,561    27,404
Federal funds sold                        1,470          -         -        -     1,470
Interest-bearing bank balances            4,399          -         -        -     4,399
                                      ---------  ----------  -------  -------  --------
   Total                                101,101      7,701    56,915   15,726   181,443
                                      ---------  ----------  -------  -------  --------
Interest-bearing liabilities:
Demand deposits  (2)                     64,918          -         -        -    64,918
Time deposits greater than $100M         9,732     17,620     1,107        -    28,459
Other time deposits                      13,414     24,123     3,202       57    40,796
Federal funds purchased, FHLB
advances, and other borrowings            6.500          -     7,000        -    13,500
                                      ---------  ----------  -------  -------  --------
   Total                                 94,564     41,743    11,309       57   147,673
                                      ---------  ----------  -------  -------  --------
Period interest-sensitivity gap       $   6,537   ($34,042)  $45,606  $15,669  $ 33,770
                                      =========  ==========  =======  =======  ========
Cumulative interest-sensitivity gap   $   6,537   ($27,505)  $18,101  $33,770
                                      =========  ==========  =======  =======
<FN>

(1)  -  Presented  at  market  value  as  all  investment  securities are classified as
"available for sale".  Includes the Bank's investment in stock of Federal Reserve Bank,
Federal  Home  Loan  Bank,  and  other  equities.
(2)  -  Includes  interest-bearing  checking  accounts, money market accounts, and
regular  savings  accounts.

</TABLE>


     At  December  31, 1999, approximately 60% of the Company's interest-earning
assets  reprice  or  mature within one year, as compared to approximately 92% of
the  interest-bearing  liabilities.

     Asset-liability management is the process by which the Company monitors and
controls  the  mix  and maturities of its assets and liabilities.  The essential
purposes  of  asset-liability management are to ensure adequate liquidity and to
maintain  an  appropriate  balance  between  interest  sensitive  assets  and
liabilities.  The  Bank  has established an Asset-Liability Management Committee
which  uses a variety of tools to analyze interest rate sensitivity, including a
static gap presentation and a simulation model.  A "static gap" presentation (as
in  the  above  table)  reflects the difference between total interest-sensitive
assets  and  liabilities within certain time periods.  While the static gap is a
widely-used measure of interest sensitivity, it is not, in management's opinion,
a true indicator of a company's sensitivity position.  It presents a static view
of  the  timing  of  maturities and repricing opportunities, without taking into
consideration  that  changes  in  interest  rates  do  not affect all assets and
liabilities  equally.  For  example,  rates  paid  on  a  substantial portion of
savings  and  core  time  deposits  may contractually change within a relatively
short time frame, but those rates are significantly less interest-sensitive than
market-based  rates  such  as  those  paid on non-core deposits.  Accordingly, a
liability  sensitive  gap  position  is  not  as  indicative of a company's true
interest sensitivity as would be the case for an organization which depends to a
greater  extent  on  purchased  funds  to  support earning assets.  Net interest
income  would  also be impacted by other significant factors in a given interest
rate  environment,  including  the  spread  between  the  prime  rate  and  the
incremental  borrowing  cost  and  the  volume  and mix of earning asset growth.
Accordingly, the Bank uses a simulation model, among other techniques, to assist
in  achieving  consistent  growth in net interest income while managing interest
rate  risk.  The  model  takes  into  account  interest  rate changes as well as
changes  in  the  mix and volume of assets and liabilities.  The model simulates
the  Company's  balance  sheet and income statement under several different rate
scenarios.  The  model's  inputs (such as interest rates and levels of loans and
deposits)  are  updated  as necessary throughout the year in order to maintain a
current  forecast as assumptions change.  The forecast presents information over
a  12  month period.  It reports a base case in which interest rates remain flat
and  reports  variations  that  occur when rates increase and decrease 100 basis
points.  According to the model, the Company is presently positioned so that net
interest  income  will increase slightly if interest rates rise in the near term
and  will  decrease  slightly  if  interest  rates  decline  in  the  near term.

SECURITIES
----------
     The  Company  maintains  a  portfolio  of  investment securities consisting
primarily of U.S. Treasury securities, U.S. government agencies, mortgage-backed
securities,  and  municipal securities.  The investment portfolio is designed to
enhance  liquidity  while  providing  acceptable rates of return.  The following
table  sets forth the carrying value of the investment securities of the Company
at  December 31, 1999, 1998, and 1997.  There were no investments categorized as
"held  to  maturity"  as  defined in Statement of Financial Accounting Standards
("SFAS")  115,  "Accounting  for  Certain  Investments  in  Debt  and  Equity
Securities".

<TABLE>
<CAPTION>

                         SECURITY PORTFOLIO COMPOSITION
                             (DOLLARS IN THOUSANDS)

                                       1999     1998     1997
                                      -------  -------  -------
<S>                                   <C>      <C>      <C>
Available for Sale, at market value:
          U.S. Treasury               $   495  $ 1,253  $ 2,750
          U.S. government agencies     12,318    9,939   11,104
          Mortgage-backed               3,537    5,421    7,251
          State and municipal          10,116   10,489    7,108
                                      -------  -------  -------
                                      $26,466  $27,102  $28,213
                                      =======  =======  =======
</TABLE>

     The  following  table  indicates  the  carrying  value  of  each investment
security  category  by  maturity  as of December 31, 1999.  The weighted average
yield  for  each  range  of  maturities at December 31, 1999 is also shown.  All
securities  are  classified  as "Available for Sale" as defined in SFAS No. 115.


<TABLE>
<CAPTION>


                                             SECURITY PORTFOLIO MATURITY SCHEDULE
                                                    (DOLLARS IN THOUSANDS)

                                                 After 1, Within      After 5, Within
                             Within 1 Year          5 Years             10 Years           After 10 Years       Total
                           ------------------   -----------------   -----------------   -----------------   -----------------
                                     Weighted            Weighted            Weighted            Weighted            Weighted
                            Market    Average   Market    Average   Market    Average   Market    Average   Market    Average
                             Value     Yield     Value     Yield     Value     Yield     Value     Yield     Value     Yield
                            -------  ---------  -------  ---------  -------  ---------  -------  ---------  -------  ---------
<S>                         <C>      <C>        <C>      <C>        <C>      <C>        <C>      <C>        <C>      <C>
U. S. Treasury                    -         -         -         -         -         -   $   495      6.29%  $   495      6.29%
U. S. Government agencies   $   501      6.10%  $ 9,033      5.90%  $ 2,785      6.30%        -         -    12,318      6.00%
Mortgage-backed                 170      5.58%      617      6.23%        -         -   $ 2,750      6.38%    3,537      6.32%
State and municipal (1)           -         -       746      7.05%    2,104      7.23%    7,265      7.67%   10,116      7.50%
                            -------  ---------  -------  ---------  -------  ---------  -------  ---------  -------  ---------
     Total                  $   671      5.98%  $10,396      6.00%  $ 4,889      6.69%  $10,510      7.30%  $26,466      6.54%
                            =======  =========  =======  =========  =======  =========  =======  =========  =======  =========
<FN>

(1)  -  Yields  have  been  adjusted  to  a  tax  equivalent  basis  assuming  a  34%  Federal  tax  rate.

</TABLE>

     The  weighted  average yields shown in the previous table are calculated on
the  basis  of  cost  and  effective  yields  for the scheduled maturity of each
security.  At  December  31,  1999,  the  market value of the Company's security
portfolio was $26.5 million compared to its amortized cost of $27.4 million.  At
year  end,  the  average  maturity  of the security portfolio was 8.8 years, the
average  duration  of  the portfolio was 5.7 years, and the average adjusted tax
equivalent  yield  on  the  portfolio  for  the year ended December 31, 1999 was
6.54%.  Certain  securities  contain  call provisions which could decrease their
anticipated  maturity.  Certain  securities  also  contain  rate  adjustment
provisions  which  could  either  increase  or  decrease  their  yields.

          Decisions  involving  securities  are  based  upon  management's
expectations  of  interest  rate  movements,  overall  market  conditions,  the
composition  and  structure of the balance sheet, and computer-based simulations
of  the  financial  impacts of alternative rate/maturity scenarios.  The Company
does  not purchase or hold securities for trading purposes.  However, securities
may be sold prior to their maturity as all securities in the Bank's portfolio at
December  31,  1999  were classified as "available for sale" and recorded on the
Company's  balance  sheet  at  market  value.


LOANS
-----
          The  loan  portfolio  is  the  Company's  principal  earning  asset.
Management  believes  that  the  loan  portfolio is adequately diversified.  The
following  table  shows  the  composition  of the loan portfolio at December 31,
1999,  1998,  and  1997.

<TABLE>
<CAPTION>

                           LOAN PORTFOLIO COMPOSITION
                             (DOLLARS IN THOUSANDS)

                                            1999       1998       1997
                                          ---------  ---------  ---------
<S>                                       <C>        <C>        <C>
Commercial and industrial                 $ 26,217   $ 24,100   $ 25,313
Commercial secured by real estate           55,647     48,527     41,172
Real estate - residential mortgages         47,366     42,832     37,683
Real estate - construction                  10,135      6,463      3,685
Installment and other consumer loans         5,402      5,656      7,819
Consumer finance, net of unearned income     3,183      2,881      2,792
Other loans, including overdrafts              220        210        291
                                          ---------  ---------  ---------
                                           148,170    130,669    118,755
Less - Allowance for loan losses            (2,163)    (1,827)    (1,728)
                                          ---------  ---------  ---------
Net loans                                 $146,007   $128,842   $117,027
                                          =========  =========  =========
</TABLE>


          The  Company's  real  estate  loans  are  primarily  owner-occupied
commercial facilities and other loans secured by both commercial and residential
real  estate located within the Company's primary market area.  The Company does
not  actively  pursue  long-term, fixed rate mortgage loans for retention in its
loan  portfolio.  Commercial  loans  are spread through a variety of industries,
with  no  industry  or  group of related industries accounting for a significant
portion  of  the commercial loan portfolio.  These loans may be made on either a
secured  or  unsecured  basis.  When  taken,  collateral  consists  of  liens on
inventories,  receivables,  equipment,  and  furniture  and fixtures.  Unsecured
commercial  loans  are generally short-term with emphasis on repayment strengths
and  low debt-to-worth ratios.  At December 31, 1999, the Company had no foreign
loans.

          A  significant portion of the installment and other consumer loans are
secured  by  automobiles  and other personal assets.  Consumer finance loans are
those  originated by the Company's consumer finance subsidiary, Freedom Finance,
Inc.  These loans generally  carry a higher risk of nonpayment than do the other
categories  of  loans,  but  the  increased  risk is substantially offset by the
smaller amounts of such loans and the higher rates charged thereon, as well as a
higher  allocation  of  the  allowance for loan losses related to Freedom's loan
portfolio.


LOAN  MATURITY  AND  INTEREST  SENSITIVITY
------------------------------------------
          The  following  table  shows  the  maturity  distribution and interest
sensitivity  of  the  Company's  loan  portfolio  at  December  31,  1999.

<TABLE>
<CAPTION>

                         LOAN PORTFOLIO MATURITY SCHEDULE
                              (DOLLARS IN THOUSANDS)

                                                     Over 1,
                                           1 Year   Less Than     Over
                                          or Less    5 Years    5 Years    Total
                                          --------  ----------  --------  --------
<S>                                       <C>       <C>         <C>       <C>
MATURITY DISTRIBUTION:
Commercial and industrial                 $ 16,148  $   10,069  $      -  $ 26,217
Real estate - commercial                    12,045      43,109       493    55,647
Real estate - residential                   17,012      22,058     8,296    47,366
Construction, development                    7,071       3,064         -    10,135
Installment and other consumer loans         1,733       3,628        41     5,402
Consumer finance, net of unearned income     3,183           -         -     3,183
Other loans, including overdrafts              220           -         -       220
                                          --------  ----------  --------  --------
Total                                     $ 57,412  $   81,928  $  8,830  $148,170
                                          ========  ==========  ========  ========

INTEREST SENSITIVITY:
Total of loans with:
Predetermined interest rates              $  9,495  $   50,501  $     80  $ 60,094
Floating interest rates                     47,917      31,427     8,750    88,076
                                          --------  ----------  --------  --------
Total                                     $ 57,412  $   81,928  $  8,830  $148,170
                                          ========  ==========  ========  ========
</TABLE>

NONPERFORMING  ASSETS  AND  POTENTIAL  PROBLEM  LOANS
-----------------------------------------------------
          The  Company's  nonperforming  assets  consist  of loans on nonaccrual
basis,  loans which are contractually past due 90 days or more on which interest
is  still being accrued, and other real estate owned ("OREO").  Generally, loans
of  the  Bank are placed on nonaccrual status when loans become 90 days past due
as  to  principal  or  interest,  or when management believes, after considering
economic  and  business  conditions  and collection efforts, that the borrower's
financial  condition  is such that collection of the loan is doubtful.  Payments
of interest on loans which are classified as nonaccrual are recognized as income
when  received.  Loans  of the Finance Company are not classified as nonaccrual,
but  are charged-off when such become 150 days contractually past due or earlier
if  the  loan  is  deemed  uncollectible.

          At  December  31,  1999  and  1998, the Bank held no other real estate
owned  acquired  in  partial  or  total satisfaction of problem loans.  One loan
totaling  $147,000  was  on  nonaccrual at December 31, 1999 while there were no
loans  on  nonaccrual  at  December  31,  1998.  There were no impaired loans at
December  31, 1999 or 1998.  Accruing loans past due 90 days and greater totaled
$130,000  or  0.09%  of gross loans at December 31, 1999 compared to $483,000 or
0.36%  of  gross  loans  at  December  31,  1998.

          Management  maintains a list of potential problem loans which includes
nonaccrual  loans,  loans past due in excess of 90 days which are still accruing
interest,  and  other  loans  which  are  credit  graded  (either internally, by
external  audits  or  regulatory  examinations) as "substandard", "doubtful", or
"loss".  A  loan  is  added  to  the  list  when  management  becomes  aware  of
information about possible credit problems of borrowers that causes doubts as to
the  ability  of such borrowers to comply with the current loan repayment terms.
The  total  amount  of  loans  outstanding at December 31, 1999 determined to be
potential problem loans, based upon management's internal designations, was $8.4
million  or  5.7% of the loan portfolio at year end, compared to $1.4 million or
1.1%  of  the  loan  portfolio  at  December  31, 1998.  The increase in 1999 is
primarily  related  to  several large commercial loans with a weakened financial
position.  However, based on collateral position, management does not anticipate
losses  on  these.  In addition, commencing in 1999, the consumer loan portfolio
received  the  same  internal  grading  criteria  as  the commercial loans, thus
increasing  the  amount  of  classified loans in comparison with the prior year.
The  amount  of  potential problem loans at December 31, 1999 does not represent
management's  estimate  of potential losses since the majority of such loans are
secured  by  real  estate  or  other  collateral.  Management  believes that the
allowance  for  loan  losses  as of December 31, 1999 was adequate to absorb any
losses  related  to  the  nonperforming loans and problem loans as of that date.

          Management  continues  to  monitor closely the levels on nonperforming
and  potential problem loans and will address the weaknesses in these credits to
enhance  the  amount of ultimate collection or recovery on these assets.  Should
increases  in  the  overall  level  of nonperforming and potential problem loans
accelerate  from  the  current trend, management will adjust the methodology for
determining  the  allowance  for loan losses and will increase the provision for
loan  losses  accordingly.  This  would  likely  decrease  net  income.

PROVISION  AND  ALLOWANCE  FOR  LOAN  LOSSES,  LOAN  LOSS  EXPERIENCE
---------------------------------------------------------------------
          The  allowance  for  loan  losses  is  based  on management's periodic
evaluation  of  the  loan portfolio and reflects an amount that, in management's
opinion, is adequate to absorb probable losses inherent in the loan portfolio at
any  point in time.  The allowance is established through charges to earnings in
the form of a provision for loan losses.  Loan losses and recoveries are charged
or  credited directly to the allowance.  The amount charged to the provision for
loan  losses  by  the Company is based on management's judgment and is dependent
upon  growth  in  the  loan  portfolios;  the  total  amount  of past due loans;
nonperforming  loans; known loan deteriorations and/or concentrations of credit;
trends  in  portfolio  volume,  maturity  and  composition; projected collateral
values;  general  economic  conditions;  and management's assessment of probable
losses  based upon internal credit grading of the loans and periodic reviews and
assessments  of  credit  risk  associated  with  particular  loans.

          In  assessing  the  adequacy  of  the  allowance,  management  relies
predominately  on  its ongoing review of the loan portfolio, which is undertaken
both  to  ascertain  whether  there  are losses which must be charged-off and to
assess  the  risk  characteristics  of the portfolio in the aggregate.  The Bank
attempts  to  deal  with  repayment  risks  through  the  establishment  of, and
adherence to, internal credit policies.  These policies include loan officer and
credit  limits, periodic documentation examination, and follow-up procedures for
any  exceptions  to  credit  policies.  Loans that are determined to involve any
more  than the normal risk are placed in a special review status.  The Company's
methodology  for  evaluating  the  adequacy  of  the  allowance  for loan losses
consists  of  a  three-tiered  process.  The  first  tier  includes  specific
allocations  set aside for low rated credits as defined in the loan policy.  The
second  tier  is  the  general  allocation  for  problem  credits  and applies a
historical  loss  factor  to  pools  of loans in each of several loan ratings as
defined  in  the  policy.  Finally, the third tier is the general portion of the
allowance  which  applies a historical loss factor to the entire loan portfolio,
not  previously  considered.  Undisbursed commitments are also evaluated in this
third  tier.  The  results  of  the  three  tiers  are combined to determine the
required  allowance.

          On  December  31, 1999, the allowance for loan losses was $2.2 million
or 1.46% of outstanding loans.  This is compared to a $1.8 million allowance for
loan  losses  at  December  31, 1998 or 1.40% of outstanding loans at that date.
For  the  year  ended  December  31, 1999, the Company reported consolidated net
charge-offs  of  $109,000  or  0.08%  of  average  loans.  This  is  compared to
consolidated  net charge-offs of $191,000 or 0.16% of average loans for the year
ended  December  31, 1998.  During 1999, the Company charged a total of $445,000
to  expense through its provision for loan losses, compared to $290,000 for 1998
and  $392,000  for  1997.  The  change  in  the provision each year was directly
related  to the level of net originations in each year as follows: $17.6 million
in  1999,  $12.1  million  in  1998,  and $15.7 million in 1997.  Another factor
influencing  the  amount  charged  to  the  provision  each  year  is  the total
outstanding  loans and charge-off activity of the Finance Company in relation to
the  consolidated  totals.  Loans  of  the Finance Company generally have higher
inherent  risk  than do loans of the Bank, and thus, require a higher provision.
Estimates  charged  to  the  provision for loan losses are based on management's
judgment as to the amount required to cover probable losses inherent in the loan
portfolio  and  are  adjusted  as  necessary.

          The  following  table  sets  forth certain information with respect to
changes  in  the  Company's  allowance for loan losses arising from charge-offs,
recoveries, and provision for the years ended December 31, 1999, 1998, and 1997.


<TABLE>
<CAPTION>

                         SUMMARY OF LOAN LOSS EXPERIENCE
                             (DOLLARS IN THOUSANDS)


                                 1999     1998     1997
                                -------  -------  -------
<S>                             <C>      <C>      <C>
Balance at beginning of period  $1,827   $1,728   $1,487
                                -------  -------  -------
Charge-offs:
   Commercial & industrial          74       26       40
   Installment & consumer          343      382      388
                                -------  -------  -------
                                   417      408      428
                                -------  -------  -------
Recoveries:
   Commercial & industrial          51       25       55
   Installment & consumer          257      192      196
                                -------  -------  -------
                                   308      217      251
                                -------  -------  -------
Net charge-offs                   (109)    (191)    (177)
Provision charged to expense       445      290      392
Allocation for purchased loans       -        -       26
                                -------  -------  -------
Balance at end of period        $2,163   $1,827   $1,728
                                =======  =======  =======
Ratio of net charge-offs to
 average loans                     .08%     .16%     .16%
                                =======  =======  =======
Ratio of allowance for loan
 losses to gross loans            1.46%    1.40%    1.46%
                                =======  =======  =======
Ratio of net charge-offs to
 allowance for loan losses        5.04%   10.45%   10.24%
                                =======  =======  =======
</TABLE>


     Management  considers  the  allowance  for  loan  losses  adequate to cover
probable  losses  inherent  in  the loan portfolio at December 31, 1999.  In the
opinion  of  management,  there  are  no  material  risks  or  significant  loan
concentrations,  and  the  allowance  for loan losses is adequate to absorb loan
losses  in  the  present  portfolios.  It  must be emphasized, however, that the
determination  of  the  allowance for loan losses using the Company's procedures
and  methods  rests upon various judgments and assumptions about future economic
conditions  and other factors affecting loans.  While it is the Company's policy
to  provide  for loan losses in the current period in which a loss is considered
probable, there are additional risks of future losses which cannot be quantified
precisely  or attributed to particular loans or classes of loans.  Because these
risks  include  the  state  of  the  economy,  industry  trends,  and conditions
affecting  individual  borrowers,  management's  judgement  of  the allowance is
necessarily  approximate  and  imprecise.  No  assurance  can  be given that the
Company  will  not  in  any particular period sustain loan losses which would be
sizable  in relationship to the amount reserved or that subsequent evaluation of
the loan portfolio, in light of conditions and factors then prevailing, will not
require  significant  changes in the allowance for loan losses or future charges
to  earnings.  The  allowance  for  loan  losses  is  also subject to review and
approval  by  various regulatory agencies through their periodic examinations of
the  Company's subsidiaries.  Such examinations could result in required changes
to  the  allowance  for  loan  losses.  No  adjustments  in  the  allowance  or
significant  adjustments  to the Bank's internal classified loans were made as a
result  of  the  Bank's  most  recent examination performed by the Office of the
Comptroller  of  the  Currency.



<PAGE>
------
COMPOSITION  OF  ALLOWANCE  FOR  LOAN  LOSSES
---------------------------------------------
     The table below presents an allocation of the allowance for loan losses for
the  years  ended  December  31,  1999,  1998,  and  1997, by the different loan
categories.  However,  the breakdown is based on a number of qualitative factors
and the amounts presented are not necessarily indicative of actual amounts which
will  be  charged  to any particular category.  Any unallocated reserve has been
included  within  the  various  loan  categories  in  the  table  below.



<TABLE>
<CAPTION>

                                     ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
                                              (DOLLARS IN THOUSANDS)

                                                1999                     1998                     1997
                                        ----------------------   ----------------------   ----------------------
                                                    Percent of               Percent of               Percent of
                                        Allowance    Loans in    Allowance    Loans in    Allowance    Loans in
                                        Breakdown    Category    Breakdown    Category    Breakdown    Category
                                        ----------  -----------  ----------  -----------  ----------  -----------
<S>                                     <C>         <C>          <C>         <C>          <C>         <C>
Commercial and industrial               $      383       17.69%  $      337       18.44%  $      368       21.32%
Real estate - commercial                       812       37.56%         679       37.14%         599       34.67%
Real estate - residential                      692       31.97%         599       32.78%         548       31.73%
Construction                                   148        6.84%          90        4.95%          54        3.10%
Installment and consumer finance loans         125        5.79%         119        6.53%         154        8.93%
Other loans, including overdrafts                3        0.15%           3        0.16%           5        0.25%
                                        ----------  -----------  ----------  -----------  ----------  -----------
                                        $    2,163      100.00%  $    1,827      100.00%  $    1,728      100.00%
                                        ==========  ===========  ==========  ===========  ==========  ===========

</TABLE>

DEPOSITS
--------
     The  Company  has  a  large,  stable  base  of  time  deposits, principally
certificates  of deposit and individual savings and retirement accounts obtained
primarily  from  customers  in  South  Carolina.  The  Company does not purchase
brokered  deposits.  At  December 31, 1999, the Company had no foreign deposits.

     The  maturity distribution of certificates of deposit greater than or equal
to  $100,000  as  of  December  31,  1999  is as follows (dollars in thousands):

<TABLE>
<CAPTION>


<S>                                                   <C>
3 months or less                                      $9,731
Greater than 3, but less than or equal to 6 months     6,589
Greater than 6, but less than or equal to 12 months   11,032
Greater than 12 months                                 1,107
                                                       -----
                                                     $28,459
                                                     =======
</TABLE>



RETURN  ON  EQUITY  AND  ASSETS
-------------------------------
     The  return  on  average  shareholders' equity ratio (net income divided by
average total equity) and the return on average assets ratio (net income divided
by  average  total assets) for the years ended December 31, 1999, 1998, and 1997
are  presented in the following table.  The Company has not paid a cash dividend
since  its  inception.  The  holders  of  common  stock  are entitled to receive
dividends when and as declared by the Board of Directors.  The Company's present
policy  is  to  retain  all earnings for the operation of the Company until such
time  as  future  earnings  support  cash  dividend  payments.

<TABLE>
<CAPTION>

                                     For the Year Ended December 31,
                                     -------------------------------
                                               1999    1998    1997
                                              ------  ------  ------
<S>                                           <C>     <C>     <C>
Return on average assets                       1.34%   1.14%   1.05%
Return on average shareholders' equity        14.45%  13.14%  12.60%
Average shareholders' equity as a percent of
  average assets                               9.25%   8.68%   8.35%
</TABLE>


ITEM  2.  PROPERTIES

     The  operations  of the Company and the Bank do not require any substantial
investment  in  fixed  assets.  The principal executive offices for the Company,
the  Bank  and  the Finance Company are located at 937 North Pleasantburg Drive,
Greenville,  South  Carolina.  In  addition, this site serves as the Bank's main
branch.  The  building  at  this  location is approximately 7,500 square feet in
area  and  is  situated on a one-acre lot.  The Company executed a lease for the
land  and  building  and  assigned the lease to the Bank effective on the Bank's
commencement  of  operations.  The  initial term of the lease commenced April 1,
1990  and  renewal options were exercised in April 1995 and September 1998.  The
term on the renewal of the lease is five years and the Company has an additional
option  to renew for a five-year period under substantially the same terms.  The
lease  provides  that  the  Company will be responsible for real property taxes,
insurance, utilities and maintenance with respect to the premises.  During 1995,
the  Bank  completed  construction  on  approximately  .63 acres of land at 2201
Augusta Road, Greenville, South Carolina of its second full service bank branch.
The  facility is approximately 6,500 square feet and is fully owned and occupied
by  the  Bank.  During  April  of 1998, the Company entered into an agreement to
lease  a  facility  for  a  branch located at 800 East North Street, Greenville,
South  Carolina.  This  facility,  which was occupied in October 1998, serves as
the  third  full service bank branch and as the Bank's operations facility.  The
facility  is  approximately  8,000  square feet and has an initial lease term of
seven  years.  This  agreement includes a renewal option for an additional seven
year  period.

     The eleven Finance Company branches throughout South Carolina are housed in
leased  facilities  averaging 1,200 square feet each with lease terms from three
to  ten  years.  The  lease  agreements  have  various  renewal  options  under
substantially  the  same  terms  as  the  original  agreements.


ITEM  3.  LEGAL  PROCEEDINGS

     Although  the  Company  is  from  time  to  time  a  party to various legal
proceedings  arising out of the ordinary course of business, management believes
there  is  no litigation or proceeding threatened or pending against the Company
that  could  reasonably  be expected to result in a materially adverse change in
the  business  or  financial  condition  of  the  Company.


ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     There were no matters submitted to a vote of the shareholders in the fourth
quarter  of  the  Company's  fiscal  year  ending  December  31,  1999.


                                     PART II

ITEM  5.     MARKET  FOR  THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

     Summit  Financial  Corporation's  common  stock  is traded in the Small-Cap
market  on  the NASDAQ system under the symbol SUMM.  As of March 10, 2000 there
were  approximately  411 shareholders of record of the common stock.  The number
of  shareholders  does  not  reflect  the number of persons or entities who hold
their  stock  in  nominee  or  "street"  name  through  various brokerage firms.

     The following table presents the high, low and closing sales prices for the
Company's common stock for each full quarterly period within the two most recent
fiscal  years.  The  source for the following information was the Nasdaq market.

<TABLE>
<CAPTION>


                                  QUARTERLY COMMON STOCK SUMMARY

                                   1999                                        1998
                         ----------------------------------   -----------------------------------
                           4Q       3Q       2Q       1Q        4Q        3Q       2Q       1Q
                         -------  -------  -------  -------  --------  --------  -------  -------
Stock Price ranges: (1)
<S>                      <C>      <C>      <C>      <C>      <C>       <C>       <C>      <C>
    High                 $ 14.00  $ 13.33  $ 14.05  $ 15.66  $  16.19  $  15.19  $ 14.86  $ 14.51
    Low                  $ 11.00  $ 11.19  $ 10.72  $ 11.91  $  11.76  $   9.98  $ 13.51  $ 11.56
    Close                $ 12.00  $ 12.38  $ 13.92  $ 12.62  $  13.81  $  14.29  $ 13.94  $ 14.46
Volume Traded             65,477   32,379   70,704   60,669    76,704    81,850   86,061   66,571

<FN>

(1) Share data have been restated to reflect eight 5% stock distributions issued between 1993 and
1999  and  the  two-for-one  stock  split  in  August  1998.
</TABLE>

     The  Company  has not paid any cash dividends.  The holders of common stock
are  entitled  to  receive  dividends  when  and  as  declared  by  the Board of
Directors.  The  Company's  present  policy  is  to  retain all earnings for the
operation  of  the  Company  until  such  time  as  future earnings support cash
dividend  payments.  Accordingly,  the  Company  does not anticipate paying cash
dividends  in the foreseeable future.  For information on dividend restrictions,
refer to Part II, Item 8. "Financial Statements and Supplementary Data", Note 14
under  Notes  to  Consolidated  Financial  Statements.

<PAGE>

ITEM  6.     SELECTED  FINANCIAL  DATA
     The  information  presented  below  should  be read in conjunction with the
consolidated  financial  statements,  the  notes  thereto  and  "Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results of Operations"
contained  under  Item  7  of  this  report.
<TABLE>
<CAPTION>

                      SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
                      ----------------------------------------------
                    (All Amounts, Except Per Share Data, In Thousands)


                                       1999       1998       1997       1996       1995
                                     ---------  ---------  ---------  ---------  ---------
INCOME STATEMENT DATA
<S>                                  <C>        <C>        <C>        <C>        <C>
Net interest income                  $  8,749   $  7,614   $  6,977   $  5,583   $  3,976
Provision for loan losses                 445        290        392        516        277
Other income                            1,560      1,408      1,035        980        611
Other expenses                          6,520      5,826      5,150      4,401      3,469
Provision for income taxes                936      1,011        895        644        312
Net income                              2,408      1,895      1,575      1,002        529

PER SHARE DATA: (1)
Basic net income                     $   0.76   $   0.60   $   0.50   $   0.32   $   0.17
Diluted net income                   $   0.65   $   0.50   $   0.46   $   0.30   $   0.16
Book value per share                 $   5.42   $   4.92   $   4.22   $   3.77   $   3.46
Closing market price per share       $  12.00   $  13.81   $  11.23   $   6.28   $   5.49

BALANCE SHEET DATA (Year End)
Total assets                         $191,229   $170,485   $160,279   $134,162   $115,072
Loans, net of unearned income         148,170    130,669    118,755    102,692     75,712
Allowance for loan losses               2,163      1,827      1,728      1,487      1,068
Total earning assets                  181,443    159,586    151,300    126,762    107,730
Deposits                              157,996    140,243    140,928    117,805     99,319
Long-term debt                          7,000      5,000          -          -          -
Shareholders' equity                   17,591     15,674     13,369     11,637     10,664

BALANCE SHEET DATA (Averages)
Total assets                         $180,141   $166,432   $149,662   $121,997   $ 95,286
Loans, net of unearned income         138,989    120,488    110,812     88,482     66,451
Total earning assets                  169,674    158,048    142,561    116,038     90,118
Deposits                              151,672    143,399    131,249    106,363     80,670
Shareholders' equity                   16,671     14,424     12,500     11,047     10,286

FINANCIAL RATIOS
Return on average assets                 1.34%      1.14%      1.05%      0.82%      0.56%
Return on average equity                14.45%     13.14%     12.60%      9.07%      5.14%
Net interest margin                      5.31%      4.95%      4.94%      4.81%      4.41%
Tier 1 risk-based capital               11.26%     10.91%     10.43%     10.79%     12.62%
Total risk-based capital                12.51%     12.16%     11.68%     12.17%     13.80%

ASSET QUALITY RATIOS
Allowance for loan losses to loans       1.46%      1.40%      1.46%      1.45%      1.41%
Net charge-offs to average loans          .08%       .16%       .16%       .17%       .09%
Nonperforming assets                 $    147          -          -   $    110          -
<FN>


(1)  All per share data has been restated to reflect all 5% stock distributions issued and
the  two-for-one  stock  split  in  August  1998.
</TABLE>

<PAGE>

ITEM  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
RESULTS  OF  OPERATIONS

     The  following  discussion  is  presented  to  provide  the  reader with an
understanding  of  the  financial  condition and results of operations of Summit
Financial  Corporation  and  its  subsidiaries, Summit National Bank and Freedom
Finance,  Inc.

FORWARD-LOOKING  STATEMENTS

     This  report  may  contain certain "forward-looking statements", within the
meaning of  Section 27A of the Securities Exchange Act of l934, as amended, that
represent  the Company's expectations or beliefs concerning future events.  Such
forward-looking  statements  are  about  matters  that are inherently subject to
certain risks, uncertainties, and assumptions.  Factors that could influence the
matters  discussed  in  certain  forward-looking statements include the relative
levels of market interest rates, loan prepayments and deposit decline rates, the
timing  and  amount  of  revenues  that  may  be  recognized  by  the  Company,
continuation  of  current  revenue,  expense  and  charge-off  trends, legal and
regulatory  changes,  and general changes in the economy.  Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect,  actual results may vary materially from those expected or projected.
These forward-looking statements speak only as of the date of the document.  The
Company assumes no obligation to update any forward-looking statements.  Because
of  the  risks and uncertainties inherent in forward-looking statements, readers
are  cautioned  not  to  place  undue  reliance  on  them.

GENERAL

     Summit  Financial  Corporation  (the  "Company") is a financial institution
holding company headquartered in Greenville, South Carolina.  The Company offers
a  broad range of financial services through its wholly-owned subsidiary, Summit
National  Bank  (the  "Bank,"  or "Summit").  The Bank is a nationally chartered
commercial  bank  which  operates  principally in the Upstate of South Carolina.
The  Bank  received its charter and commenced operations in July 1990.  In 1997,
the  Bank  incorporated  Summit  Investment  Services,  Inc.  as  a wholly-owned
subsidiary  to  provide  a  wider  range  of  investment  products and financial
planning  services.  The  Bank  currently  has  three  full  service  offices in
Greenville, South Carolina.  Summit provides a full range of banking services to
individuals  and  businesses,  including the taking of time and demand deposits,
making  loans, and offering nondeposit investment services.  The Bank emphasizes
close  personal contact with its customers and strives to provide a consistently
high  level  of  service  to  both  individual  and  corporate  customers.

     Freedom  Finance,  Inc.  (the  "Finance  Company"  or  "Freedom,")  is  a
wholly-owned subsidiary of the Company  which is operating as a consumer finance
company  headquartered  in  Greenville,  South  Carolina.  The  Finance  Company
primarily  makes  and  services  installment  loans  to  individuals  with  loan
principal  amounts  generally  not  exceeding $2,000 and with maturities ranging
from  three  to  eighteen  months.  Freedom  operates eleven branches throughout
South  Carolina.

INCOME  STATEMENT  REVIEW

GENERAL
     The  Company  reported record earnings in 1999 which were up 27% from 1998.
Net  income  totaled  $2.4 million, or $0.65 diluted earnings per share, in 1999
compared with $1.9 million, or $0.50 diluted earnings per share in 1998 and $1.6
million  or  $0.46  diluted earnings per share for 1997.  The improvement in net
income  and earnings per share between 1998 and 1999 resulted primarily from the
growth in earning assets combined with a reduction in the overall cost of funds.
Increases  in  other  income  also contributed to the higher net income in 1999.

NET  INTEREST  INCOME
     Net interest income is the difference between the interest earned on assets
and  the  interest paid for the liabilities used to support those assets.  It is
the  largest  component  of  the  Company's  earnings and changes in it have the
greatest  impact  on net income.  Variations in the volume and mix of assets and
liabilities  and their relative sensitivity to interest rate movements determine
changes  in  net  interest  income.

     During 1999 the Company recorded net interest income of $8.7 million, a 15%
increase from the 1998 net interest income of $7.6 million.  This is compared to
net  interest  income  of  $7.0  million for 1997.  The increase in net interest
income  in  1999  is  directly  related  to the increase in the average loan and
interest-bearing  liability  volume  of  the  Bank  of 15% and 7%, respectively,
combined  with  the  36  basis  point increase in net interest margin during the
year.  Net  interest income increased in 1998 also related to the higher average
loan  and  interest-bearing deposit volume of the Bank which was up from 1997 by
9%  and  10%,  respectively.

     For the year ended December 31, 1999, the Company's net interest margin was
5.31%, compared to 4.95% in 1998 and 4.94% for 1997.  The net interest margin is
calculated as net interest income divided by average earning assets.  The margin
for  1999  increased  36  basis  points from the prior year due primarily to the
reduction  in  the  cost  of  funds  as  CDs  with higher rates matured and were
replaced  with  lower  market  rate deposits.  The higher percentage of variable
rate  deposits  also  contributed  to  the  lower cost of funds as deposits were
repricing  immediately  in  the  declining  rate  period  between  late 1998 and
mid-year  1999.  The  margins between 1998 and 1997 remained fairly constant due
to  the  lower cost of funds in 1998 which offset the declining rate environment
experienced  in  the  fourth  quarter  of  1998  and resulted in lower yields on
assets.

INTEREST  INCOME
     Interest  income  for 1999 was $15.4 million which was a $1.0 million or 7%
increase  over  the  $14.4 million for 1998.  Interest income for 1997 was $13.4
million.  The increases each year are primarily a result of the higher levels of
earning  assets which averaged $169.7 million, $158.0 million and $142.6 million
in  1999,  1998  and  1997,  respectively.  Changes  in average yield on earning
assets  also  affects the interest income reported each year.  The average yield
decreased  from  9.43%  in  1997  to 9.26% in 1998, and 9.21% in 1999 due to the
general  declining  rate  environment  from  the  fourth quarter of 1998 through
mid-year  1999.

     The  majority  of  the  increase in average earning assets between 1997 and
1998  and  between  1998  and 1999 was in loans, which are the Company's highest
yielding  assets  that  account  for  82% of average earning assets for the year
ended  1999.  Consolidated loans averaged $139.0 million in 1999 with an average
yield  of  9.84%,  compared  to  $120.5 million in 1998 with an average yield of
10.19%, and $110.8 million in 1997 with an average yield of 10.37%.  The average
loan  rate dropped in 1998 as compared to 1997 as a direct result of the decline
in  the  prime rate which averaged 8.44% in 1997 and 8.36% in 1998.  The average
prime  rate dropped again in 1999 to 8.00% resulting in further decreases in the
average yield on loans.  Combined with the general declining rate environment in
1998  and  into  1999,  were  continuing  competitive  pricing  pressures in the
marketplace.  The  higher  level of average loans each year, partially offset by
the decreases in average rate, resulted in increases in interest income on loans
of  $784,000  or  7% between 1997 and 1998, and $1.4 million or 11% between 1998
and  1999.

     The  second largest component of earning assets is the Company's investment
portfolio which averaged $26.2 million yielding 6.54% in 1999.  This is compared
to average securities of $27.5 million in 1998 yielding 6.47%, and $21.3 million
yielding  6.47%  for  1997.  The increase in the average yield of the investment
portfolio  is  related  to  the  timing,  maturity  distribution  and  types  of
securities  purchased.  The higher level of average securities in 1998, combined
with the increase in average rate, resulted in an increase in interest income on
investments  of $260,000 or 20% between 1997 and 1998.  However, the decrease in
average  securities in 1999 offset the higher yields that year and resulted in a
$117,000  or 7% reduction in interest income on investments as compared to 1998.

INTEREST  EXPENSE
     The  Company's interest expense for 1999 was $6.6 million, compared to $6.8
million  for  1998  and  $6.4  million  for 1997.  The reduction in the interest
expense  in  1999  was  a  result of the 7% increase in average interest-bearing
liabilities  being  more than offset by the 49 basis point reduction in the cost
of  funds.  The  increase  in  interest  expense  of 6% between 1997 and 1998 is
primarily  related to the 10% increase in the average volume of interest-bearing
liabilities  in  1998 partially offset by the decrease of 14 basis points in the
average  rate  on interest-bearing liabilities.  The lower average cost of funds
in  1999  and  1998  was primarily a result of the maturity of higher priced CDs
combined with the restructure of the deposit portfolio to lower costing variable
rate  deposits.  Interest-bearing  liabilities  averaged  $142.4 million in 1999
with  an  average  rate  of  4.65%,  compared  to $132.3 million in 1998 with an
average  rate of 5.14%, and an average of $121.2 million with an average rate of
5.28%  during  1997.

<TABLE>
<CAPTION>

                            AVERAGE YIELDS AND RATES

                               For the Years Ended December 31,
                               --------------------------------
(on a fully tax-equivalent basis)         1999    1998    1997
                                          -----  ------  ------
<S>                                       <C>    <C>     <C>
EARNING ASSETS:
Loans                                     9.84%  10.19%  10.37%
Securities                                6.54%   6.47%   6.47%
Short-term investments                    5.51%   5.70%   5.57%
                                          -----  ------  ------
     Total earning assets                 9.21%   9.26%   9.43%
                                          =====  ======  ======
INTEREST-BEARING LIABILITIES:
Interest-bearing deposits                 4.59%   5.11%   5.25%
Short-term borrowings                     5.61%   6.07%   6.21%
FHLB advances                             5.42%   5.67%   6.52%
     Total interest-bearing liabilities   4.65%   5.14%   5.28%
                                          -----  ------  ------
NET INTEREST MARGIN                       5.31%   4.95%   4.94%
                                          =====  ======  ======
AVERAGE PRIME INTEREST RATE               8.00%   8.36%   8.44%
                                          =====  ======  ======
</TABLE>

PROVISION  FOR  LOAN  LOSSES
     The  provision  for loan losses was $445,000 in 1999, $290,000 in 1998, and
$392,000 in 1997.  The change in the provision each year was directly related to
the  level  of  net originations in each year as follows: $17.6 million in 1999,
$12.1  million  in  1998, and $15.7 million in 1997.  Another factor influencing
the amount charged to the provision each year is the total outstanding loans and
charge-off  activity  of  the  Finance  Company  in relation to the consolidated
totals.  Loans  of  the Finance Company generally have higher inherent risk than
do  loans  of the Bank, and thus, require a higher provision.  Estimates charged
to  the  provision  for loan losses are based on management's judgment as to the
amount  required to cover inherent losses in the loan portfolio and are adjusted
as  necessary.

NONINTEREST  INCOME  AND  EXPENSES
     Noninterest  income increased $152,000 or 11%, to $1.6 million in 1999 from
$1.4 million in 1998 and $1.0 million in 1997.  Credit card fees and income, the
largest  single  item  in  noninterest income, rose 13% to $338,000 in 1999 from
$298,000  in  1998  and $248,000 in 1997.  The increase is related to the higher
volume of transactions and merchant activity in the Bank's credit card portfolio
each  year.  The  higher amount in service charges and fees on deposit accounts,
which  increased  22%  in 1999 to $247,000 from $203,000 in 1998 and $194,000 in
1997,  is related to the increases in the transaction fees and the higher number
of  Bank  deposit accounts and transactions subject to service charges and fees.
In  addition,  service charge fee increases were implemented in March 1999 which
contributed  to  the  higher  income.

     Insurance commission fee income increased $93,000 between 1997 and 1998 and
decreased  $32,000 between 1998 and 1999 related to fluctuations in the level of
activity  for  both  the  Bank  and  the Finance Company.  Included in insurance
commissions  is  income  from  annuity  sales  made  in  the  Bank's  nondeposit
investment  sales  department and earned commissions on credit-related insurance
products  generated  by  the  Finance  Company.

     The remainder of the changes in other income is related to (1) late charges
and  other  income  on loans of the Bank and the Finance Company which increased
$35,000 in 1998 and $20,000 in 1999 related to the higher number of branches and
customer  accounts; (2) the level of activity in the Bank's nondeposit financial
services  and brokerage department which resulted in increased income in 1998 of
$73,000,  and  a  decrease in 1999 of $29,000; and (3) gains on sales of company
vehicles  in 1999 totaling approximately $18,000.  Other increases each year are
related  to the higher level of activity and transactions of the Bank generating
other  income  in  the  normal  course  of  business.

     Total noninterest expenses were $6.5 million in 1999, $5.8 million in 1998,
and  $5.2  million  in 1997.  A majority of the increased expenditures each year
reflects  the cost of additional personnel hired to support the Company's growth
and  the  new  bank  branch  opened  in  the  fourth  quarter of 1998.  The most
significant  item  included  in  noninterest  expenses  is  salaries,  wages and
benefits  which amounted to $3.5 million in 1999, $3.2 million in 1998, and $2.7
million  in  1997.  The  increase of $332,000 in 1999 was a result of (1) normal
annual  raises  and  increases  in  the  bonus and incentive payments due to the
Bank's growth and increased profitability; (2) the Bank incurring a full year of
expense  for  the  additional employees added at the new branch in October 1998;
and  (3)  additional  support  and  lending  staff added in the normal course of
business  throughout 1999.  The increase of $441,000 in 1998 was a result of (1)
normal  annual  raises;  (2)  higher  commissions  paid related to the increased
volume of nondeposit product sales in 1998; (3) the amortization of compensation
expense  related  to  restricted  stock granted in late 1997; and (4) additional
benefit  accruals  pursuant  to  a  new  retirement  plan  implemented  in 1998.

     Occupancy  and  furniture,  fixtures,  and  equipment  expenses  increased
$172,000  or  17% to $1.2 million in 1999 from $1.0 million in 1998 and $890,000
in  1997.  The increase in 1999 was related primarily to there being a full year
of rent, depreciation, and other associated expenses for the new branch facility
which  opened  in  October  1998.  The increase in 1998 was related primarily to
higher  depreciation  and  associated expenses at the Bank related to technology
implementations,  furnishing and equipment additions, and other expenses for the
new  branch  facility  which  opened  in  October  1998.

     Included in the line item "other expenses", which increased $190,000 or 12%
between  1998 and 1999, and $86,000 or 6% between 1997 and 1998, are charges for
insurance  claims  and  premiums;  printing  and  office  support;  credit  card
expenses;  professional  services;  advertising  and public relations; and other
branch  and  customer  related  expenses.  A majority of these items are related
directly  to  the  normal operations of the Bank and increase in relation to the
increase  in  assets,  the  higher  level  of transaction volume, and the larger
number  of customer accounts.  The Bank's activity accounted for $216,000 of the
increase  in  1999 (partially offset by decreases in the other subsidiaries) and
$45,000  of  the  increase in 1998.  The Bank's increase is primarily related to
the  higher  level  of activity and number of accounts as compared to each prior
year and the associated office support charges for the new branch which was open
for  the full year in 1999.  In addition, in 1999 the Bank incurred higher legal
expenses  related to repossessions and collections of charged-off and nonaccrual
loans;  advertising  expenses  related  to  the  implementation and marketing of
internet  banking  products  and  a new web site; and Y2K expenses which totaled
approximately  $24,000  for  1999.

INCOME  TAXES
     The Company recorded an income tax provision of $936,000, $1.0 million, and
$895,000 for 1999, 1998, and 1997, respectively.  The effective tax rate in each
year  was  28%, 35%, and 36%, respectively.  The decrease in effective rate each
year is primarily related to the higher level of tax-free municipal investments.


BALANCE  SHEET  REVIEW

INVESTMENT  SECURITIES
     At December 31, 1999, the Company's total investment portfolio had a market
value  of  $26.5  million,  which  is  a  decrease  of 2% from the $27.1 million
invested  as  of the end of 1998.  Investments had an amortized cost at the 1999
year  end  of  $27.4  million.  The  investment  portfolio consists primarily of
United  States  Treasury  securities,  securities  of  United  States government
agencies,  mortgage-backed securities, and state and municipal obligations.  The
Company  has no trading account securities.  At the 1999 year end, the portfolio
had  a  weighted  average  maturity  of  approximately  8.0 years and an average
duration  of  5.3  years.  Investment securities averaged $26.2 million yielding
6.54%  in  1999,  compared  to the 1998 average of $27.5 million yielding 6.47%.
Securities are the second largest earning asset of the Company at 15% and 17% of
average  earning  assets  for  1999  and  1998,  respectively.

LOANS
     The  loan  portfolio consists primarily of commercial and industrial loans;
commercial  loans  secured  by  real estate; loans secured by one-to-four family
residential mortgages; and consumer loans.  Substantially all of these loans are
located  in  the Upstate of South Carolina and are concentrated in the Company's
market  area.  At  December  31,  1999,  the  Company  had  no  loans for highly
leveraged  transactions and no foreign loans.  The Bank's primary focus has been
on  commercial  lending to small and medium-sized businesses in its marketplace.
Commercial loans are spread throughout a variety of industries, with no industry
or  group  of  related  industries  accounting  for a significant portion of the
commercial  loan  portfolio.

     As  of  December  31, 1999, the Company had total loans outstanding, net of
unearned income, of $148.2 million which represents an increase of $17.5 million
or  13%  from  the  1998 outstanding loans of $130.7 million.  Outstanding loans
represent  the  largest  component  of  earning assets at 82% of average earning
assets  for 1999 compared to 76% for 1998.  Gross loans were 77% of total assets
at  both December 31, 1999 and 1998.  The 13% increase in loans between 1998 and
1999  is  attributable  to  internal  growth as the Company did not purchase any
loans  during  the  year.  Freedom's  outstanding loans, net of unearned income,
totaled  $3.2 million, or 2.1% of consolidated loans at December 31, 1999.  This
is  compared to $2.9 million or 2.2% of consolidated loans at December 31, 1998.

     For  1999,  the  Company's  loans  averaged  $139.0 million with a yield of
9.84%.  This  is compared to $120.5 million average loans with a yield of 10.19%
in  1998.  The  interest rates charged on loans of the Bank vary with the degree
of  risk,  maturity and amount of the loan.  Competitive pressures, money market
rates,  availability  of  funds,  and  government  policy  and  regulations also
influence  interest  rates.  Loans  of  the  Finance Company are regulated under
state  laws which establish the maximum loan amounts and interest rates, and the
types  and maximum amounts of fees, insurance premiums, and other costs that may
be  charged.  The  decrease  in  the loan yield during 1999 reflects the general
declining rate environment experienced in the fourth quarter of 1998 through the
first  half  of 1999.  During this time, the prime lending rate dropped 75 basis
points.  Approximately  62%  of the Bank's loan portfolio has variable rates and
immediately  reprices with a change in the prime rate.  The drop in prime during
1998  and into 1999,  combined with the continuing competitive pricing pressures
on  loans  of  the  Company, reduced the overall yield on loans during the year.

     The allowance for loan losses is established through charges in the form of
a  provision for loan losses. Loan losses and recoveries are charged or credited
directly  to the allowance.  The amount charged to the provision for loan losses
by  the Bank and the Finance Company is based on management's judgment as to the
amounts required to maintain an adequate allowance.  The level of this allowance
is  dependent  upon  growth in the loan portfolios; the total amount of past due
loans;  nonperforming loans; and known loan deteriorations and/or concentrations
of  credit.  Other  factors  affecting  the  allowance  are  trends in portfolio
volume,  maturity  and  composition;  collateral  values;  and  general economic
conditions.  Finally,  management's  assessment  of  probable  losses based upon
internal  credit  grading  of  the loans and periodic reviews and assessments of
credit  risk  associated with particular loans is considered in establishing the
allowance  amount.

     Management  maintains  an  allowance  for  loan  losses  which  it believes
adequate  to cover inherent losses in the loan portfolio.  However, management's
judgment  is  based  upon  a number of assumptions about future events which are
believed  to  be  reasonable,  but  which may or may not prove valid.  There are
risks  of  future  losses  which cannot be quantified precisely or attributed to
particular  loans  or  classes  of  loans.  Management uses the best information
available  to make evaluations, however, future adjustments to the allowance may
be  necessary  if  economic conditions differ substantially from the assumptions
used  in  making  evaluations.  The  Company  is  also  subject  to  regulatory
examinations  and  determinations as to the adequacy of the allowance, which may
take  into  account  such  factors  as  the  methodology  used  to calculate the
allowance for loan losses and the size of the allowance in comparison to a group
of  peer  companies  identified  by  the  regulatory  agencies.

     The  allowance for loan losses totaled $2.2 million or 1.46% of total loans
at  the  end  of 1999.  This is compared to a $1.8 million allowance or 1.40% of
total  loans  at  December  31, 1998.  For the year ended December 31, 1999, the
Company  reported  net  charge-offs of $109,000 or 0.08% of consolidated average
loans.  This is compared to consolidated net charge-offs of $191,000 or 0.16% of
average  loans  for  the  year  ended  December  31,  1998.

     Loans past due 90 days and greater totaled $130,000 or 0.09% of gross loans
at  December  31,  1999 compared to $483,000 or 0.36% of gross loans at December
31,  1998.  One  loan  totaling $147,000 was on nonaccrual at December 31, 1999.
There were no loans on nonaccrual at December 31, 1998.  Generally, loans of the
Bank  are  placed  on  nonaccrual status at the earlier of when they are 90 days
past  due  or  when  the  collection of the loan becomes doubtful.  Loans of the
Finance  Company are not classified as nonaccrual, but are charged-off when such
become  150  days  contractually  past  due  or  earlier  if  the loan is deemed
uncollectible.  At  December  31,  1999  and  1998,  the Bank held no other real
estate  owned acquired in partial or total satisfaction of problem loans.  There
were  no  impaired  loans  at  either  December  31,  1999  or  1998.

INTEREST-BEARING  LIABILITIES
     During  1999,  interest-bearing liabilities averaged $142.4 million with an
average  rate  of 4.65% compared to $132.3 million with an average rate of 5.14%
in  1998.  The  decrease  in  the average rate is primarily a result of maturing
certificates  of  deposit  at higher rates that were replaced with lower current
market  rates and the general restructuring of the deposit portfolio to a higher
percentage  of  variable  rate demand deposits which have a lower cost of funds.
In  pricing  deposits,  the Company considers its liquidity needs, the direction
and levels of interest rates and local market conditions.  At December 31, 1999,
interest-bearing  deposits comprised approximately 85% of total deposits and 91%
of  interest-bearing liabilities.  The remainder of interest-bearing liabilities
consists  principally  of  Federal  Home  Loan  Bank  advances and federal funds
purchased.

     The  Company  uses  its deposit base as a primary source with which to fund
earning assets.  Deposits increased 13% from $140.2 million at December 31, 1998
to  $158.0  million  as  of  year  end  1999.  The increase was primarily in the
non-interest-bearing  demand accounts, interest-bearing demand accounts and time
deposits  greater  than  $100,000.  Average  noninterest-bearing deposits, which
increased  14%  during the year, increased to 12.7% of average total deposits in
1999  from  12.2%  in  1998.

     The  Company's  core deposit base consists of consumer and commercial money
market  accounts,  checking  accounts,  savings  and  retirement  accounts,  NOW
accounts,  and non-jumbo time deposits (less than $100,000).  Although such core
deposits continue to be interest sensitive for both the Company and the industry
as  a  whole,  these  deposits  continue to provide the Company with a large and
stable  source  of  funds.  The  Company  closely  monitors  its  reliance  on
certificates  of  deposit  greater than $100,000, which are generally considered
less  stable  and more interest rate sensitive than core deposits.  Certificates
of deposit in excess of $100,000 represented 18% and 15%, respectively, of total
deposits  at  December 31, 1999 and 1998.  The Company has no brokered deposits.


CAPITAL  RESOURCES

     Total  shareholders'  equity  amounted  to  $17.6 million, or 9.2% of total
assets,  at  December  31,  1999.  This is compared to $15.7 million, or 9.2% of
total  assets,  at  December  31,  1998.  The  $1.9  million  increase  in total
shareholders'  equity  resulted principally from retention of earnings and stock
issued  pursuant  to the Company's stock option plans, offset by the increase in
unrealized  loss  on  investments  available  for  sale.

     Book  value  per  share  at December 31, 1999 and 1998 was $5.42 and $4.91,
respectively.   On  November  29,  1999,  the Company issued its eighth 5% stock
distribution  in  the  form  of a stock dividend to shareholders of record as of
November  18, 1999.  This dividend resulted in the issuance of 153,822 shares of
the  Company's  $1.00  par  value  common  stock.

     In August 1998, the Company issued a two-for-one stock split which resulted
in  the  issuance  of 1,444,299 shares of common stock.  The stated par value of
each share was not changed from $1.00.  All weighted average share and per share
data  has  been  restated to reflect the stock split and all stock distributions
issued.

     To  date,  the  capital  needs  of  the  Company  have been met through the
retention  of  earnings  and from the proceeds of its initial offering of common
stock.  The  Company  believes that the rate of asset growth will not negatively
impact  the capital base.  The Company has no commitments or immediate plans for
any  significant  capital expenditures outside of the normal course of business.
The  Company's  management  does not know of any trends, events or uncertainties
that  may  result  in  the  Company's capital resources materially increasing or
decreasing.

     The  following  table sets forth various capital ratios for the Company and
the Bank at December 31, 1999 and 1998.  The Company and the Bank are subject to
various  regulatory  capital  requirements  administered  by the federal banking
agencies.  At  December  31,  1999  and  1998,  the Company and the Bank were in
compliance  with  each  of  the applicable regulatory capital requirements.  The
Bank exceeded the "well-capitalized" standard under the regulatory framework for
prompt  corrective  action.

<TABLE>
<CAPTION>
                                 CAPITAL SUMMARY

                               The Company             The Bank
                            ------------------    ------------------
                             As of      As of      As of      As of
                           12/31/99   12/31/98   12/31/99   12/31/98
                           ---------  ---------  ---------  ---------
<S>                        <C>        <C>        <C>        <C>
Total risk-based capital      12.51%     12.16%     11.37%     11.12%
Tier 1 risk-based capital     11.26%     10.91%     10.16%      9.94%
Leverage capital               9.97%      9.08%      9.00%      8.25%
</TABLE>

LIQUIDITY

     Liquidity  management  involves  meeting  the cash flow requirements of the
Company.  The  Company  must maintain an adequate liquidity position in order to
respond  to  the  short-term demand for funds caused by withdrawals from deposit
accounts, maturities of repurchase agreements, extensions of credit, and for the
payment  of  operating  expenses.  Maintaining an adequate level of liquidity is
accomplished  through  a combination of liquid assets, those which can easily be
converted  into  cash, and access to additional sources of funds.  The Company's
primary liquid assets are cash and due from banks, federal funds sold, unpledged
investment  securities  available  for  sale,  other  short-term investments and
maturing  loans.  These  primary  liquidity sources accounted for 13% and 17% of
average  assets  for  each  of  the  years  ended  December  31,  1999 and 1998,
respectively.  In management's opinion, the Company maintains adequate levels of
liquidity  by  retaining sufficient liquid assets and assets which can be easily
converted  into cash and by maintaining access to various sources of funds.  The
primary  sources  of  funds available through the Bank include advances from the
Federal  Home  Loan  Bank,  purchasing  federal  funds  from  other  financial
institutions,  lines  of credit through the Federal Reserve Bank, and increasing
deposits  by  raising  rates  paid.

     Summit  Financial  Corporation  ("Summit  Financial"),  the  parent holding
company,  has  limited  liquidity needs.  Summit Financial requires liquidity to
pay  limited operating expenses,  and to provide funding to its consumer finance
subsidiary, Freedom Finance.  Summit Financial has approximately $1.8 million in
available liquidity remaining from its initial public offering and the retention
of  earnings.  All of this liquidity was advanced to the Finance Company to fund
its  operations  as  of December 31, 1999.  In addition, Summit Financial has an
available  line  of  credit totaling $2.5 million with an unaffiliated financial
institution,  all  of which was available at December 31, 1999.  Further sources
of  liquidity  for  Summit  Financial  include  borrowings from individuals, and
management  fees  and debt service which are paid by its subsidiary on a monthly
basis.

     Liquidity  needs  of  Freedom  Finance,  primarily  for the funding of loan
originations  and  acquisitions,  paying operating expenses, and servicing debt,
have been met to date through the initial capital investment of $500,000 made by
Summit  Financial,  borrowings  from  an unrelated private investor, and line of
credit  facilities  provided  by  Summit  Financial  and Summit National Bank, a
sister  company.

     The  Company's  management  believes  its liquidity sources are adequate to
meet  its  operating  needs  and  does  not  know  of  any  trends,  events  or
uncertainties  that  may result in a significant adverse affect on the Company's
liquidity  position.

EFFECT  OF  INFLATION  AND  CHANGING  PRICES

     The consolidated financial statements have been prepared in accordance with
generally  accepted  accounting  principles  which  require  the  measurement of
financial  position  and  results  of operations in terms of historical dollars,
without  consideration of changes in the relative purchasing power over time due
to  inflation.  Unlike  most  other  industries, virtually all of the assets and
liabilities  of  a  financial  institution are monetary in nature.  As a result,
interest  rates  generally  have  a  more  significant  effect  in  a  financial
institution's  performance  than  does  the  effect  of  inflation.

     The  yield  on  a  majority  of  the  Company's  earning  assets  adjusts
simultaneously  with  changes  in  the  general  level  of  interest  rates.
Approximately  45%  of  the  Company's liabilities at December 31, 1999 had been
issued with fixed terms and can be repriced only at maturity.  During periods of
falling  interest  rates, as experienced in late 1998 and through mid-year 1999,
the  Company's  assets  reprice  faster  than  the supporting liabilities.  This
causes  a  decrease  in  the  net  interest margin until the fixed rate deposits
mature  and  are repriced at then lower current market rates, thus narrowing the
difference  between what the Company earns on its assets and what it pays on its
liabilities.  Given  the Company's current balance sheet structure, the opposite
effect  (that  is,  an  increase in net interest income) is realized in a rising
rate  environment  as  was  experienced  in  the  latter  half  of  1999.

ACCOUNTING,  REPORTING  AND  REGULATORY  MATTERS

     In  June  1998,  the  Financial  Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  133,  "Accounting for
Derivative  Instruments  and Hedging Activities."  SFAS 133 changes the previous
accounting definition of a derivative and discusses the appropriateness of hedge
accounting  for  various  forms of hedging activities.  Under this standard, all
derivatives  are  measured  at  fair  value  and  recognized in the statement of
financial  position as assets or liabilities.  This standard, as amended by SFAS
137,  is  effective  for  all fiscal quarters and years beginning after June 15,
2000,  with  earlier  adoption  permitted.  Management does not expect that this
standard  will  have  a  significant  effect  on  the  Company.

YEAR  2000

     The Company's management believes it has adequately addressed the Year 2000
issue  and  has  successfully  executed  its  Year  2000  Action Plan.  Both the
Company's  bank  subsidiary  and  finance  company  subsidiary have successfully
processed  transactions  on a daily and month end basis in the year 2000.  There
have  been  no  errors or computer system problems determined since the calender
date  rollover to January 1, 2000.  The cost during 1999 of making modifications
and  preparing  for Y2K issues was nominal.  Corrections and "fixes" to software
provided  by third-party vendors was covered in the annual maintenance fees paid
by  the  Company  on  a regular basis.  The Company has encountered no increased
credit  risk or losses related to any customer Y2K issues since the century date
rollover.  Management  does  not  know  of any trends, events, or uncertainities
related  to  the  Year  2000 issues that it believes may result in a significant
adverse  effect  on  the  Company's  financial  position.

INTEREST  RATE  SENSITIVITY

     Achieving  consistent  growth  in net interest income, which is affected by
fluctuations  in  interest  rates,  is  the  primary  goal  of  the  Company's
asset/liability  function.  The  Company  attempts  to  control  the  mix  and
maturities  of  assets  and liabilities to maintain a reasonable balance between
exposure  to  interest  rate fluctuations and earnings and to achieve consistent
growth in net interest income, while maintaining adequate liquidity and capital.
A  sudden  and  substantial  increase in interest rates may adversely impact the
Company's  earnings  to  the  extent that the interest rates on interest-earning
assets  and interest-bearing liabilities do not change at the same speed, to the
same  extent  or  on  the  same  basis.  The  Company's  asset/liability  mix is
sufficiently  balanced  so  that  the  effect of interest rates moving in either
direction  is  not  expected  to  be  significant  over  time.

     The  Company's  Asset/Liability Committee ("ALCO") uses a simulation model,
among other techniques, to assist in achieving consistent growth in net interest
income  while managing interest rate risk.  The model takes into account, over a
12 month period or longer if necessary, interest rate changes as well as changes
in  the  mix  and  volume  of  assets  and liabilities.  The model simulates the
Company's  balance  sheet  and  income  statement  under  several different rate
scenarios  and  rate  shocks.  The  model's  inputs  (such as interest rates and
levels  of  loans  and deposits) are updated as necessary throughout the year in
order  to  maintain  a current forecast as assumptions change.  According to the
model,  the  Company  is  presently  positioned so that net interest income will
increase  slightly  if  interest  rates  rise in the near term and will decrease
slightly  if  interest  rates  decline  in  the  near  term.

     The Company also uses interest rate sensitivity gap analysis to monitor the
relationship  between  the maturity and repricing of its interest-earning assets
and  interest-bearing  liabilities.  Interest rate sensitivity gap is defined as
the  difference  between  the  amount  of  interest-earning  assets  maturing or
repricing  within  a  specific  time  period  and the amount of interest-bearing
liabilities  maturing  or  repricing  within  the  same time period.  The static
interest  sensitivity  gap  position,  while  not a complete measure of interest
sensitivity, is also reviewed periodically to provide insights related to static
repricing  structure  of  assets  and  liabilities.  At  December 31, 1999, on a
cumulative  basis  through  12  months,  rate-sensitive  liabilities  exceed
rate-sensitive  assets,  resulting  in  a  12  month  period liability sensitive
position  of  $27.5  million.  When  the  effective change ratio (the historical
relative  movement  of  each  asset's and liability's rates in relation to a 100
basis  point  change in the prime rate) is applied to the interest gap position,
the  Company  is  actually in an asset sensitive position over a 12 month period
and the entire repricing lives of the assets and liabilities.  This is primarily
due  to  the  fact  that  over  62% of the loan portfolio moves immediately on a
one-to-one  ratio with a change in the prime rate, while the deposit accounts do
not  increase  or  decrease  as  much  relative  to  a  prime  rate  movement.

     The  Company's  asset  sensitive  position means that assets reprice faster
than  the  liabilities, which generally results in increases in the net interest
income  during periods of rising rates and decreases in net interest income when
market  rates  decline.  In  the fourth quarter of 1998, interest rates dropped,
leading to declines in the average yield on assets for 1998 as compared to 1997.
However,  the  Company  was  able to maintain the net interest margin relatively
constant with the 1997 margin due to the reduction in the overall cost of funds.
General  market  interest  rates continued to decline into 1999 resulting in the
decrease  in  asset  yield.  The  Company  was able to increase its net interest
margin in 1999 as compared to 1998 due to the continued reduction in the cost of
funds.  The  lower  rate on liabilities was the result of a higher percentage of
floating  rate  deposits  in  1999  combined  with  the  replacement of maturing
certificates  of  deposit  and  FHLB  advances  at  lower  current market rates.


ITEM  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     Market  risk  is the risk of loss from adverse changes in market prices and
rates.  The  Company's  market  risk  arises principally from interest rate risk
inherent  in its lending, investing, deposit gathering and borrowing activities.
Management  actively  monitors  and  manages  its  interest  rate risk exposure.
Although the Company manages other risks, including credit quality and liquidity
risk,  in the normal course of business, management considers interest rate risk
to be its most significant market risk and it could potentially have the largest
material  effect on the Company's financial condition and results of operations.
Other  types  of  market  risks, such as foreign currency exchange rate risk and
commodity  price  risk,  do  not  arise  in  the  normal course of the Company's
business  activities.

     The  Bank's  ALCO  monitors  and considers methods of managing the rate and
sensitivity repricing characteristics of the balance sheet components consistent
with maintaining acceptable levels of changes in net portfolio value ("NPV") and
net  interest  income.  Net  portfolio  value  represents  the  market  value of
portfolio  equity  and  is  equal to the market value of assets minus the market
value  of  liabilities, with adjustments made for off-balance sheet items over a
range  of  assumed  changes  in market interest rates.  A primary purpose of the
Company's  asset  and  liability  management  is to manage interest rate risk to
effectively  invest  the  Company's capital and to preserve the value created by
its  core business operations.  As such, certain management monitoring processes
are  designed to minimize the impact of sudden and sustained changes in interest
rates  on  NPV  and  net  interest  income.

     The  Company's  exposure  to  interest  rate risk is reviewed on a periodic
basis  by  the  Board  of  Directors  and  the  ALCO  which  is charged with the
responsibility  to  maintain  the  level  of  sensitivity  of  the Company's net
portfolio  value  within  Board approved limits.  Interest rate risk exposure is
measured using interest rate sensitivity analysis by computing estimated changes
in  NPV  of its cash flows from assets, liabilities, and off-balance sheet items
in  the  event  of  a  range  of assumed changes in market interest rates.  This
analysis  assesses  the risk of loss in market risk sensitive instruments in the
event  of  a sudden and sustained 100 - 300 basis points increase or decrease in
the  market  interest  rates.  The  Company's  Board of Directors has adopted an
interest  rate  risk policy which establishes maximum allowable decreases in NPV
in  the  event of a sudden and sustained increase or decrease in market interest
rates.

     The  following table presents the Company's projected change in NPV for the
various rate shock levels as of year end.  This table indicates that at December
31,  1999,  in  the  event  of a sudden and sustained increase in the prevailing
market interest rates, the Company's NPV would be expected to decrease, and that
in the event of a sudden and sustained decrease in rate, the Company's NPV would
be  expected to increase.  At December 31, 1999, the Company's estimated changes
in  NPV  were  within  the  limits  established  by  the  Board.

<TABLE>
<CAPTION>



                                     Market
                                    Value of
                                    Portfolio
                          Policy     Equity     Percent
Change in Interest Rates   Limit     (000s)      Change
------------------------  -------  -----------  --------
<S>                       <C>      <C>          <C>
300 basis point rise       40.00%  $    16,280     7.50%
200 basis point rise       25.00%  $    16,640     5.40%
100 basis point rise       10.00%  $    17,083     2.90%
No change                   0.00%  $    17,591     0.00%
100 basis point decline    10.00%  $    17,854     1.50%
200 basis point decline    25.00%  $    17,928     1.90%
300 basis point decline    40.00%  $    17,883     1.70%
</TABLE>






ITEM  8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

<PAGE>

<TABLE>
<CAPTION>

                  SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)

                                                                December 31,
                                                                ------------
                                                              1999       1998
                                                            ---------  ---------
<S>                                                         <C>        <C>
ASSETS
Cash and due from banks                                     $  3,952   $  5,377
Interest-bearing bank balances                                 4,399        623
Federal funds sold                                             1,470        400
Investment securities available for sale                      26,466     27,102
Loans, net of unearned income and net of allowance
 for loan losses of $2,163 and $1,827                        146,007    128,842
Premises and equipment, net                                    2,890      3,101
Accrued interest receivable                                    1,337      1,132
Other assets                                                   4,708      3,908
                                                            ---------  ---------
                                                            $191,229   $170,485
                                                            =========  =========

  LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:
 Noninterest-bearing demand                                 $ 23,823   $ 20,877
 Interest-bearing demand                                      14,073      8,541
 Savings and money market                                     50,845     50,047
 Time deposits, $100,000 and over                             28,459     20,633
 Other time deposits                                          40,796     40,145
                                                            ---------  ---------
                                                             157,996    140,243
Federal funds purchased                                        4,000      2,720
Repurchase agreements                                              -        846
Other short-term borrowings                                      500        820
FHLB advances                                                  9,000      8,000
Accrued interest payable                                       1,132      1,052
Other liabilities                                              1,010      1,130
                                                            ---------  ---------
     Total liabilities                                       173,638    154,811
                                                            ---------  ---------

Shareholders' equity:
 Common stock, $1.00 par value; 20,000,000 shares
  authorized; 3,243,739 and 3,038,706 shares
  issued and outstanding                                       3,244      3,039
 Additional paid-in capital                                   14,730     12,726
 Retained earnings                                               483          -
 Accumulated other comprehensive (loss) income, net of tax      (563)       313
 Nonvested restricted stock                                     (303)      (404)
                                                            ---------  ---------
     Total shareholders' equity                               17,591     15,674
                                                            ---------  ---------
                                                            $191,229   $170,485
                                                            =========  =========
<FN>

          See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                     SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF INCOME
                     (Dollars in Thousands, except Per Share Data)

                                                      For the Years Ended December 31,
                                                      --------------------------------
                                                            1999      1998      1997
                                                          --------  --------  --------
<S>                                                       <C>       <C>       <C>
INTEREST INCOME:
 Loans                                                    $13,676   $12,275   $11,491
 Taxable securities                                           951     1,155     1,173
 Nontaxable securities                                        500       413       135
 Federal funds sold                                           102       397       410
 Other                                                        148       176       172
                                                          --------  --------  --------
                                                           15,377    14,416    13,381
                                                          --------  --------  --------
INTEREST EXPENSE:
 Deposits                                                   6,086     6,431     6,140
 FHLB advances                                                463       256       170
 Other                                                         79       115        94
                                                          --------  --------  --------
                                                            6,628     6,802     6,404
                                                          --------  --------  --------
     Net interest income                                    8,749     7,614     6,977
PROVISION FOR LOAN LOSSES                                    (445)     (290)     (392)
                                                          --------  --------  --------
     Net interest income after provision for loan losses    8,304     7,324     6,585
                                                          --------  --------  --------
NONINTEREST INCOME:
 Service charges and fees on deposit accounts                 247       203       194
 Credit card fees and income                                  338       298       248
 Gain on sale of investment securities                         22         1         -
 Insurance commission fee income                              254       286       193
 Other income                                                 699       620       400
                                                          --------  --------  --------
                                                            1,560     1,408     1,035
                                                          --------  --------  --------
NONINTEREST EXPENSES:
 Salaries, wages and benefits                               3,499     3,167     2,726
 Occupancy                                                    578       494       442
 Furniture, fixtures and equipment                            633       545       448
 Other expenses                                             1,810     1,620     1,534
                                                          --------  --------  --------
                                                            6,520     5,826     5,150
                                                          --------  --------  --------
Income before income taxes                                  3,344     2,906     2,470
Income taxes                                                 (936)   (1,011)     (895)
                                                          --------  --------  --------
NET INCOME                                                $ 2,408   $ 1,895   $ 1,575
                                                          ========  ========  ========

NET INCOME PER COMMON SHARE:
  Basic                                                   $  0.76   $  0.60   $  0.50
  Diluted                                                 $  0.65   $  0.50   $  0.46

AVERAGE SHARES OUTSTANDING:
  Basic                                                     3,176     3,138     3,115
  Diluted                                                   3,727     3,762     3,443
<FN>

             See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                           SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                       FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
                                                      (Dollars in Thousands)


                                                                                       Accumulated
                                                            Additional                    Other        Nonvested        Total
                                                   Common     Paid-in     Retained    Comprehensive   Restricted    Shareholders'
                                                    Stock     capital     earnings     income, net       stock         Equity
                                                   -------  -----------  ----------  ---------------  -----------  ---------------
<S>                                                <C>      <C>          <C>         <C>              <C>          <C>
Balance at December 31, 1996                       $ 2,670  $     8,919  $      48                -            -   $       11,637
Net income for the year ended
December 31, 1997                                        -            -      1,575                -            -            1,575
Other comprehensive income:
 Unrealized holding gains on securities
arising during the period, net of taxes of $47           -            -          -               90            -               90
                                                                                                                   ---------------
Comprehensive income                                     -            -          -                -            -            1,665
                                                                                                                   ---------------
Stock options exercised                                 22           50          -                -            -               72
Issuance of common stock pursuant
to restricted stock plan                                48          457          -                -         (505)               -
Issuance of 5% stock distribution                      136        1,482     (1,618)               -            -                -
Cash in lieu of fractional shares                        -            -         (5)               -            -               (5)
                                                   -------  -----------  ----------  ---------------  -----------  ---------------
Balance at December 31, 1997                         2,876       10,908          -               90         (505)          13,369
Net income for the year ended
December 31, 1998                                        -            -      1,895                -            -            1,895
Other comprehensive income:
Unrealized holding gains on securities
arising during the period, net of taxes of $146          -            -          -              223            -              223
                                                                                                                   ---------------
Comprehensive income                                     -            -          -                -            -            2,118
                                                                                                                   ---------------
Stock options exercised                                 18           70          -                -            -               88
Amortization of deferred compensation
on restricted stock                                      -            -          -                -          101              101
Issuance of 5% stock distribution                      145        1,748     (1,893)               -            -                -
Cash in lieu of fractional shares                        -            -         (2)               -            -               (2)
                                                   -------  -----------  ----------  ---------------  -----------  ---------------
Balance at December 31, 1998                         3,039       12,726          -              313         (404)          15,674
Net income for the year ended
December 31, 1999                                        -            -      2,408                -            -            2,408
Other comprehensive loss:
Unrealized holding losses on securities
arising during the period, net of taxes of ($531)        -            -          -             (860)           -
 Less: reclassification adjustment for gains
 included in net income, net of tax of $6                -            -          -              (16)
                                                                                     ---------------
 Other comprehensive loss                                -            -          -             (876)           -             (876)
                                                                                     ---------------               ----------------
Comprehensive income                                     -            -          -                -            -            1,532
                                                                                                                   ---------------
Stock options exercised                                 53          233          -                -            -              286
Amortization of deferred
 compensation on restricted stock                        -            -          -                -          101              101
Issuance of 5% stock distribution                      152        1,771     (1,923)               -            -                -
Cash in lieu of fractional shares                        -            -         (2)               -            -               (2)
                                                   -------  -----------  ----------  ---------------  -----------  ---------------
Balance December 31, 1999                          $ 3,244  $    14,730  $     483   $         (563)       ($303)  $       17,591
                                                   =======  ===========  ==========  ===============  ===========  ===============
<FN>

                                   See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                    SUMMIT FINANCIAL CORPORATION
                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (Dollars in Thousands)

                                                                    For the Years Ended December 31,
                                                                    --------------------------------
                                                                       1999       1998       1997
                                                                     ---------  ---------  ---------
<S>                                                                  <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                         $  2,408   $  1,895   $  1,575
  Adjustments to reconcile net income to net cash
provided by operating activities:
    Provision for loan losses                                             445        290        392
    Depreciation                                                          496        403        487
    (Gain) loss on sale and disposal of equipment and vehicles            (18)        34        (23)
    Gain on sale of securities available for sale                         (22)        (1)         -
    Net amortization of net premium on investment securities               75         56         26
    Amortization of deferred compensation on restricted stock             101        101          -
    (Increase) decrease in other assets                                  (335)       226       (504)
    Increase (decrease) in other liabilities                              152       (143)       723
    Deferred income taxes                                                (179)      (140)        23
                                                                     ---------  ---------  ---------
         Net cash provided by operating activities                      3,123      2,721      2,699
                                                                     ---------  ---------  ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of securities available for sale                           (7,483)   (11,406)   (18,953)
  Proceeds from sales of securities available for sale                  1,021        951      3,271
  Proceeds from maturities of securities available for sale             5,632     11,882      6,091
  Purchases of investments in FHLB and other stock                       (146)       (84)       (74)
  Purchase of company-owned life insurance                                  -     (1,725)         -
  Net increase in loans                                               (17,610)   (12,106)   (15,715)
  Purchases of finance loans receivable                                     -          -       (499)
  Purchases of premises and equipment                                    (315)    (1,178)      (208)
  Proceeds from sale of equipment and vehicles                             49          -         41
                                                                     ---------  ---------  ---------
         Net cash used by investing activities                        (18,852)   (13,666)   (26,046)
                                                                     ---------  ---------  ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase (decrease) in deposit accounts                          17,753       (685)    23,123
  Net increase in federal funds purchased and repurchase agreements       433      2,763         42
  Proceeds from FHLB advances                                          10,550      8,500      2,000
  Repayments of FHLB advances                                          (9,550)    (2,500)    (2,000)
  Net (repayments) proceeds from other
short-term borrowings                                                    (320)      (180)       450
  Proceeds from stock options exercised                                   286         88         72
  Cash paid in lieu of fractional shares                                   (2)        (2)        (5)
                                                                     ---------  ---------  ---------
         Net cash provided by financing activities                     19,150      7,984     23,682
                                                                     ---------  ---------  ---------
Net increase (decrease) in cash and cash equivalents                    3,421     (2,961)       335
Cash and cash equivalents, beginning of year                            6,400      9,361      9,026
                                                                     ---------  ---------  ---------
Cash and cash equivalents, end of year                               $  9,821   $  6,400   $  9,361
                                                                     =========  =========  =========
<FN>

                    See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>



                  SUMMIT FINANCIAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

PRINCIPLES  OF CONSOLIDATION  -  Summit Financial Corporation (the "Company"), a
South  Carolina  corporation,  is the parent holding company for Summit National
Bank  (the  "Bank"), a nationally chartered bank, and Freedom Finance, Inc. (the
"Finance  Company"), a consumer finance company.  In 1997, the Bank incorporated
Summit  Investment  Services,  Inc.  as  a  wholly-owned  subsidiary  to provide
financial  management  services  and nondeposit product sales.  The accompanying
consolidated  financial  statements  include the accounts of the Company and its
subsidiaries.  All  significant intercompany accounts and transactions have been
eliminated  in  consolidation.

USE  OF  ESTIMATES  -  The  consolidated  financial  statements  are prepared in
conformity with generally accepted accounting principles ("GAAP") which requires
management  to  make estimates and assumptions.  These estimates and assumptions
affect  the  reported  amounts  of  assets and liabilities and the disclosure of
contingent  assets  and liabilities at the date of the financial statements.  In
addition,  they  affect  the  reported  amounts of income and expense during the
reporting  period.  Actual  results  could  differ  from  these  estimates  and
assumptions.

INVESTMENT  SECURITIES  -  At  the  time  of purchase, investment securities are
classified by management into three categories as follows:  (1) Investments Held
to Maturity: securities which the Company has the positive intent and ability to
hold  to maturity, which are reported at amortized cost; (2) Trading Securities:
securities  that are bought and held principally for the purpose of selling them
in  the  near future, which are reported at fair value with unrealized gains and
losses  included in earnings; and (3) Investments Available for Sale: securities
that  may  be  sold  under certain conditions, which are reported at fair value,
with  unrealized  gains  and  losses  excluded  from  earnings and reported as a
separate  component  of  shareholders'  equity,  net  of  income  taxes.  The
amortization of premiums and accretion of discounts on investment securities are
recorded  as  adjustments  to  interest  income.  Gains  or  losses  on sales of
investment  securities  are  based on the net proceeds and the adjusted carrying
amount  of  the  securities  sold,  using  the  specific  identification method.
Unrealized  losses  on  securities,  reflecting a decline in value or impairment
judged  by  the Company to be other than temporary, are charged to income in the
consolidated  statements  of  income.

LOANS  AND  INTEREST  INCOME  -  Loans  of  the  Bank  are  carried at principal
amounts,  reduced by an allowance for loan losses.  The Bank recognizes interest
income daily based on the principal amount outstanding using the simple interest
method.  The  accrual of interest is generally discontinued on loans of the Bank
which  become  90  days  past due as to principal or interest or when management
believes,  after  considering  economic  and  business conditions and collection
efforts,  that  the  borrower's  financial  condition is such that collection of
interest is doubtful.  Management may elect to continue accrual of interest when
the  estimated  net  realizable  value  of collateral is sufficient to cover the
principal  balances  and  accrued  interest  and  the  loan is in the process of
collection.  Amounts  received on nonaccrual loans generally are applied against
principal prior to the recognition of any interest income.  Generally, loans are
restored to accrual status when the obligation is brought current, has performed
in accordance with the contractual terms for a reasonable period of time and the
ultimate  collectibility  of  the total contractual principal and interest is no
longer  in  doubt.

     Loans  of  the Finance Company are carried at the gross amount outstanding,
reduced  by  unearned interest, insurance income and other deferred fees, and an
allowance  for loan losses.  Unearned interest and fees are deferred at the time
the  loans are made and accreted to income using the "Rule of 78's" method.  The
results  from  the use of the "Rule of 78's" method are not materially different
from  those  obtained  by  using  the  simple interest method.  Charges for late
payments  are  credited  to income when collected.  Loans of the Finance Company
are  generally  charged-off  when  they  become  150 days past due or when it is
determined  that  collection  is  doubtful.

IMPAIRMENT  OF  LOANS  -  Loans  are  considered  to  be  impaired  when,  in
management's  judgment,  the collection of all amounts of principal and interest
is not probable in accordance with the terms of the loan agreement.  The Company
accounts for impaired loans in accordance with Statement of Financial Accounting
Standards  ("SFAS")  114, "Accounting by Creditors for Impairment of a Loan", as
amended  by  SFAS  118  in  the  areas of disclosure requirements and methods of
recognizing  income.  SFAS  114 requires that impaired loans be recorded at fair
value,  which  is determined based upon the present value of expected cash flows
discounted  at the loan's effective interest rate, the market price of the loan,
if  available,  or the value of the underlying collateral.  All cash receipts on
impaired  loans  are  applied  to  principal until such time as the principal is
brought  current.  After  principal has been satisfied, future cash receipts are
applied  to  interest income, to the extent that any interest has been foregone.
As  a  practical  matter, the Bank determines which loans are impaired through a
loan  review  process.

ALLOWANCE  FOR  LOAN  LOSSES  -  The  allowance  for  loan losses is established
through a provision for loan losses charged to operations and reflects an amount
that,  in  management's  opinion,  is  adequate to absorb inherent losses in the
existing  portfolio.  Additions  to  the  allowance  are  based  on management's
evaluation  of  the  loan portfolio under current economic conditions, past loan
loss  experience,  and  such  other  factors  which,  in management's judgement,
deserve  recognition  in  estimating  loan  losses.

     Loans  are  charged-off when, in the opinion of management, they are deemed
to  be  uncollectible.  Recognized  losses are charged against the allowance and
subsequent  recoveries are added to the allowance.  Management believes that the
allowance  is adequate.  While management uses the best information available to
make  evaluations,  future  adjustments  to  the  allowance  may be necessary if
economic conditions differ substantially from the assumptions used in making the
evaluations.  The allowance for loan losses is subject to periodic evaluation by
various  regulatory  authorities  and  may  be subject to adjustments based upon
information  that  is  available  to  them  at  the  time  of their examination.

LOAN  FEES  -  Loan  origination  fees and direct costs of loan originations are
deferred  and  recognized as an adjustment of yield by the interest method based
on  the  contractual  terms  of the loan.  Loan commitment fees are deferred and
recognized  as  an  adjustment  of yield over the related loan's life, or if the
commitment  expires  unexercised,  recognized  in  income  upon  expiration.

PREMISES  AND  EQUIPMENT  -  Premises,  equipment and leasehold improvements are
stated  at cost less accumulated depreciation and amortization.  Depreciation is
recorded  using  the  straight-line method over the estimated useful life of the
related  assets as follows: building, 40 years; furniture and fixtures, 7 years;
equipment  and  computer  hardware  and  software, 3 to 7 years; and vehicles, 3
years.  Amortization  of  leasehold  improvements  is  recorded  using  the
straight-line  method  over the lesser of the estimated useful life of the asset
or  the  term  of the respective lease.  Additions to premises and equipment and
major  replacements  or betterments are added at cost.  Maintenance, repairs and
minor  replacements  are  charged to operating expense as incurred.  When assets
are  retired or otherwise disposed of, the cost and accumulated depreciation are
removed  from  the  accounts  and  any  gain  or  loss  is  reflected in income.

INTANGIBLE  ASSETS  -  Intangible  assets  consist  primarily  of  goodwill  and
customer  lists resulting from the Finance Company's branch acquisitions.  On an
ongoing  basis,  the  Company  evaluates  the carrying value of these intangible
assets  and  determines  whether  these  assets have been impaired based upon an
undiscounted  cash  flow  approach.  Amortization  of intangibles is provided by
using  the straight-line method over the estimated economic lives of the assets,
which  is  generally from 5 - 7 years.  Intangible assets are included in "Other
assets"  on  the  accompanying  consolidated balance sheets and have unamortized
balances  of  $497,000 and $654,000 at December 31, 1999 and 1998, respectively,
with related amortization of $157,000, $157,000 and $154,000 for the years ended
December  31,  1999,  1998,  and  1997,  respectively.

STOCK-BASED  COMPENSATION  -  The Company reports stock-based compensation using
the  intrinsic  value  method  prescribed in Accounting Principles Board Opinion
("APB")  25,  "Accounting  for  Stock  Issued  to  Employees",  which  measures
compensation  expense  as  the excess, if any, of the quoted market price of the
Company's stock at the date of the grant over the amount an employee must pay to
acquire  the  stock.  SFAS  123,  "Accounting  for  Stock-Based  Compensation",
encourages  but  does  not  require  companies  to  record compensation cost for
stock-based  compensation  plans  at  fair  value.  The  Company  follows  the
disclosure-only  provisions  of  SFAS  123.

PER  SHARE  DATA  -  Earnings  per share ("EPS") are computed in accordance with
SFAS 128, "Earnings per Share."  SFAS 128 requires companies to report basic and
diluted  EPS.  Basic EPS includes no dilution and is computed by dividing income
available to common shareholders by the weighted-average number of common shares
outstanding  for  the  period.  Shares of restricted stock that are unvested are
not  included  in weighted average shares outstanding.  Diluted EPS reflects the
potential  dilution  of  securities  that  could occur if the Company's dilutive
stock  options  were  exercised.  Weighted average share and per share data have
been  restated  to  reflect  the  August 1998 two-for-one stock split and all 5%
stock  distributions.

REPORTING  COMPREHENSIVE  INCOME  -  As  of January 1, 1998, the Company adopted
SFAS  130,  "Reporting  Comprehensive Income."  SFAS 130 requires that all items
that  are  required to be recognized under accounting standards as comprehensive
income  be  reported  in  a  financial statement that is displayed with the same
prominence  as  other financial statements.  The disclosure requirements of SFAS
130 have been included in the Company's consolidated statements of shareholders'
equity  and  comprehensive  income.

INCOME  TAXES  -  Income  taxes  are  accounted for in accordance with SFAS 109,
"Accounting  for  Income  Taxes".  Under  the asset and liability method of SFAS
109,  deferred  tax  assets  and  liabilities  are recognized for the future tax
consequences  attributable  to  differences  between  the  financial  statement
carrying  amounts  of  existing  assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using the enacted rates
expected  to  apply  to  taxable  income  in  the years in which those temporary
differences are expected to be recovered or settled.  Under SFAS 109, the effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.  Valuation allowances are
established to reduce deferred tax assets if it is determined to be "more likely
than  not" that all or some portion of the potential deferred tax asset will not
be  realized.

RECLASSIFICATIONS  -  Certain  amounts  in  the  1998  and  1997  consolidated
financial  statements  have  been  reclassified  to  conform  with  the  1999
presentations.  These reclassifications had no impact on shareholders' equity or
net  income  as  previously  reported.

NOTE  2  -  STATEMENT  OF  CASH  FLOWS
     For  the  purpose of reporting cash flows, cash includes currency and coin,
cash  items  in  process of collection and due from banks.  Included in cash and
cash  equivalents are federal funds sold and overnight investments.  The Company
considers  the  amounts  included in the balance sheet line items, "Cash and due
from  banks",  "Interest-bearing  bank  balances" and "Federal funds sold" to be
cash  and cash equivalents.  These accounts totaled $9,821,000 and $6,400,000 at
December  31,  1999  and  1998,  respectively.

The  following  summarizes  supplemental  cash  flow  data  for  the years ended
December  31:
<TABLE>
<CAPTION>

(dollars in thousands)                1999     1998    1997
-----------------------------------  -------  ------  ------
<S>                                  <C>      <C>     <C>
Interest paid                        $6,548   $7,120  $5,857
Income taxes paid                     1,162      870   1,065
Change in fair value of investment
 securities, net of income taxes       (876)     223      90
</TABLE>

NOTE  3  -  RESTRICTIONS  ON  CASH  AND  DUE  FROM  BANKS
     The  Company's  banking  subsidiary is required to maintain average reserve
balances with the Federal Reserve Bank based upon a percentage of deposits.  The
amount  of  the  required  reserve  balance  at  December  31, 1999 and 1998 was
$834,000  and  $543,000,  respectively.

NOTE  4  -  INVESTMENT  SECURITIES
     The  aggregate  amortized  cost, fair value, and gross unrealized gains and
losses  of  investment  securities  available  for  sale  at December 31 were as
follows:

<TABLE>
<CAPTION>

(dollars in thousands)                       1999                                          1998
----------------------    -----------------------------------------    ----------------------------------------
                                         Gross Unrealized                            Gross Unrealized
                          Amortized   ---------------------   Fair     Amortized  ---------------------   Fair
                             Cost        Gains      Losses    Value      Cost        Gains      Losses    Value
                          ----------  -----------  --------  -------  ----------  -----------  --------  -------
<S>                       <C>         <C>          <C>       <C>      <C>         <C>          <C>       <C>
U.S. treasury             $      489  $         6  $     -   $   495  $    1,250  $         3  $     -   $ 1,253
U.S. government agencies      12,483            -     (165)   12,318       9,819          123       (3)    9,939
Mortgage-backed                3,573            -      (36)    3,537       5,404           31      (14)    5,421
States and municipal          10,829            3     (716)   10,116      10,124          370       (5)   10,489
                          ----------  -----------  --------  -------  ----------  -----------  --------  -------
                          $   27,374  $         9    ($917)  $26,466  $   26,597  $       527     ($22)  $27,102
                          ==========  ===========  ========  =======  ==========  ===========  ========  =======
</TABLE>

     The  amortized  cost  and  estimated  fair  value  of investment securities
available  for  sale at December 31, 1999, by contractual maturity, are shown in
the following table.  Expected maturities may differ from contractual maturities
because issuers may have the right to call or prepay obligations with or without
prepayment  penalties.  Fair  value  of  securities  was determined using quoted
market  prices.

<TABLE>
<CAPTION>

                                          Amortized    Fair
(dollars in thousands)                       Cost      Value
----------------------------------------  ----------  -------
<S>                                       <C>         <C>
Due in one year or less                   $      668  $   671
Due after one year, through five years        10,494   10,396
Due after five years, through ten years        4,989    4,889
Due after ten years                           11,223   10,510
                                          ----------  -------
                                          $   27,374  $26,466
                                          ==========  =======
</TABLE>

     The  change in the unrealized gain on securities available for sale, net of
taxes, recorded in shareholders' equity for the year ended December 31, 1999 was
($876,000).  Investment securities with an approximate book value of $13,045,000
and  $8,589,000  at  December  31,  1999 and 1998, respectively, were pledged to
secure  public  deposits and for other purposes as required or permitted by law.
Estimated  fair  values of securities pledged were $12,717,000 and $8,734,000 at
December 31, 1999 and 1998, respectively.  There were no gross unrealized losses
on  sales  of  securities  in  any  year  presented.  There  were  no securities
classified  as  "Held  to  Maturity"  in  any  year  presented.

NOTE  5  -  INVESTMENTS  REQUIRED  BY  LAW
     Summit  National  Bank, as a member of the Federal Reserve Bank ("FRB") and
the Federal Home Loan Bank of Atlanta ("FHLB"), is required to own capital stock
in  these  organizations.  The  Bank's  equity  investments  required by law are
included in the accompanying consolidated balance sheets in "Other assets".  The
amount  of  stock owned is based on the Bank's capital levels in the case of the
FRB  and  totaled  $255,000  at  December 31, 1999 and 1998.  The amount of FHLB
stock  owned is determined based on the Bank's balances of residential mortgages
and  advances  from  the  FHLB and totaled $550,000 and $479,000 at December 31,
1999  and  1998, respectively.  No ready market exists for these stocks and they
have  no  quoted  market  value.  However,  redemption  of  these  stocks  has
historically been at par value.  Accordingly, the carrying amounts are deemed to
be  a  reasonable  estimate  of  fair  value.

NOTE  6  -  LOANS  AND  ALLOWANCE  FOR  LOAN  LOSSES
     A  summary  of  loans  by  classification  at  December  31  is as follows:

<TABLE>
<CAPTION>

(dollars in thousands)                       1999       1998
-----------------------------------------  ---------  ---------
<S>                                        <C>        <C>
Commercial and industrial                  $ 26,217   $ 24,100
Commercial secured by real estate            55,647     48,527
Real estate - residential mortgages          47,366     42,832
Real estate - construction                   10,135      6,463
Installment and other consumer loans          5,402      5,656
Consumer finance, net of unearned income      3,183      2,881
Other loans and overdrafts                      220        210
                                           ---------  ---------
                                            148,170    130,669
Less - allowance for loan losses             (2,163)    (1,827)
                                           ---------  ---------
                                           $146,007   $128,842
                                           =========  =========
</TABLE>

     Unearned  income on consumer finance loans totaled $939,000 and $808,000 at
December  31,  1999  and  1998, respectively.  One loan totaling $147,000 was on
nonaccrual  at  December  31,  1999.  Foregone interest income on the nonaccrual
loan  was  approximately  $4,000 during 1999 while interest income recognized on
this  loan  was approximately $17,000 during the year.  This nonaccrual loan was
not considered impaired at December 31, 1999.  There were no loans on nonaccrual
at  December  31,  1998.  Loans  past  due  in  excess  of  90  days amounted to
approximately $130,000 and $483,000 at December 31, 1999 and 1998, respectively.
There were no foreclosed loans or other real estate owned in any year presented.
There  were  no  impaired  loans  at or for the years ended December 31, 1999 or
1998.

     Changes  in  the  allowance for loan losses for the years ended December 31
were  as  follows:

<TABLE>
<CAPTION>

(dollars in thousands)                            1999     1998     1997
-----------------------------------------------  -------  -------  -------
<S>                                              <C>      <C>      <C>
Balance, beginning of year                       $1,827   $1,728   $1,487
    Provision for losses                            445      290      392
    Loans charged-off                              (417)    (408)    (428)
    Recoveries of loans previously charged-off      308      217      251
    Allocation for purchased loans                    -        -       26
                                                 _______  _______  _______
Balance, end of year                             $2,163   $1,827   $1,728
                                                 =======  =======  =======
</TABLE>

     The  Company  makes loans to individuals and small- to mid-sized businesses
for  various  personal and commercial purposes primarily in the Upstate of South
Carolina.  The  Company  has a diversified loan portfolio and the Company's loan
portfolio  is  not  dependent  upon  any specific economic segment.  The Company
regularly  monitors  its  credit concentrations based on loan purpose, industry,
and  customer  base.  As  of  December  31,  1999,  there  were  no  material
concentrations  of  credit  risk  within  the  Company's  loan  portfolio.

     Directors, executive officers, and associates of such persons are customers
of  and  have  transactions  with  the Company's bank subsidiary in the ordinary
course  of  business.  Included  in  such transactions are outstanding loans and
commitments,  all  of  which are made under substantially the same credit terms,
including  interest  rates  and  collateral, as those prevailing at the time for
comparable  transactions with unrelated persons and do not involve more than the
normal risk of collectibility.  The aggregate dollar amount of these outstanding
loans was approximately $5,200,000 and $5,515,000 at December 31, 1999 and 1998,
respectively.  During  1999,  new  loans  and  advances  on  lines  of credit of
approximately  $2,358,000  were  made,  and  payments  on  these loans and lines
totaled  approximately $2,673,000.  At December 31, 1999, there were commitments
to  extend  additional  credit to related parties in the amount of approximately
$3,300,000.

     Under  current  Federal  Reserve  regulations,  the  Bank is limited in the
amount  it  may  loan  to the Company, the Finance Company, or other affiliates.
Loans  made  by  the Bank to a single affiliate may not exceed 10%, and loans to
all  affiliates  may not exceed 20% of the Bank's capital, surplus and undivided
profits,  after  adding  back  the  allowance  for  loan losses.  Based on these
limitations,  approximately  $3.5 million was available for loans to the Company
and  the  Finance Company at December 31, 1999.  Certain collateral restrictions
also  apply  to  loans  from  the  Bank  to  its  affiliates.

NOTE  7  -  PREMISES,  EQUIPMENT  AND  LEASES
     A  summary  of  premises  and  equipment  at  December  31  is  as follows:

<TABLE>
<CAPTION>

(dollars in thousands)              1999      1998
--------------------------------  --------  --------
<S>                               <C>       <C>
Land                              $   483   $   483
Building                            1,255     1,252
Leasehold improvements                839       825
Computer and office equipment       1,559     1,372
Furniture and fixtures                625       612
Vehicles                               94        91
                                  --------  --------
                                    4,855     4,635
Less - accumulated depreciation    (1,965)   (1,534)
                                  --------  --------
                                  $ 2,890   $ 3,101
                                  ========  ========
</TABLE>

     Depreciation  expense charged to operations totaled $496,000, $403,000, and
$487,000  in  1999,  1998  and  1997,  respectively.

     The  Company  leases  branch  facilities  for both the Bank and the Finance
Company.  These  leases  have initial terms of from two to ten years and various
renewal  options  under  substantially  the  same  terms  with  certain  rate
escalations.   Rent  expense  charged  to operations totaled $271,000, $226,000,
and  $204,000,  respectively,  for  the years ended December 31, 1999, 1998, and
1997.  The  annual  minimum  rental commitments under the terms of the Company's
noncancellable  leases  at  December  31,  1999  are  as  follows:  (dollars  in
thousands)

<TABLE>
<CAPTION>

<S>         <C>
2000        $  269
2001           239
2002           222
2003           225
2004           197
Thereafter      55
            ------
            $1,207
            ======
</TABLE>

NOTE  8  -  DEPOSITS
     The  scheduled  maturities of time deposits subsequent to December 31, 1999
are  as  follows:  (dollars  in  thousands)

<TABLE>
<CAPTION>

<S>         <C>
2000        $64,862
2001          3,401
2002            742
2003             42
2004            124
Thereafter       84
            -------
            $69,255
            =======
</TABLE>

     The  remaining  maturity  of  time  deposits  in denominations in excess of
$100,000 is $9,731,000 in three months or less; $6,589,000 in over three through
six  months;  $11,032,000  in  over six through twelve months; and $1,107,000 in
over  twelve  months.

NOTE  9  -  BORROWED  FUNDS
     Federal funds purchased represent unsecured overnight borrowings from other
financial  institutions  by  the  Bank.  These  borrowings  bear interest at the
prevailing  market  rate for federal funds purchased.  Average interest rates on
federal  funds  purchased  were 5.02% and 5.40% for the years ended December 31,
1999 and 1998, respectively.  There were no federal funds purchased during 1997.

     Other  short-term borrowings consist of term loan agreements with unrelated
individuals  which  have  initial  maturities of less than one year.  These term
loans  are  unsecured  and  bear  interest at fixed rates.  The weighted-average
interest  rate  on  short-term borrowings outstanding at each year end was 6.50%
and  6.91%  at  December  31,  1999  and  1998,  respectively.

     Repurchase  agreements  represent  short-term  borrowings  by the Bank with
overnight  maturities  which  rollover  under a continuing contract.  Repurchase
agreements  are  collateralized  by securities of U.S. government agencies or by
obligations of state and political subdivisions.  All pledged collateral is held
by  a  third-party  safekeeper.  Pledged securities for repurchase agreements at
December 31, 1998 had a book value of $1,073,000 and a fair value of $1,099,000.
There  were  no  repurchase  agreements  outstanding  during  1999.

     The  following  is  a  summary  of  information  related to the outstanding
repurchase  agreements  for  each  of  the  years  ended  December  31:

<TABLE>
<CAPTION>

(dollars in thousands)            1998    1997
-------------------------------  ------  ------
<S>                              <C>     <C>
Average outstanding              $ 823   $ 789
Maximum at any month-end         $ 846   $ 803
Weighted-average interest rate    4.85%   5.42%
</TABLE>

     The  components  of  other  interest  expense  for  each of the years ended
December  31  presented in the accompanying consolidated statements of income is
as  follows:

<TABLE>
<CAPTION>

(dollars in thousands)        1999   1998   1997
----------------------------  -----  -----  -----
<S>                           <C>    <C>    <C>
Federal funds purchased       $  46  $   2  $   -
Repurchase agreements             -     41     42
Other short-term borrowings      33     72     52
                             ------  -----  -----
                              $  79  $ 115  $  94
                              =====  =====  =====
</TABLE>

NOTE  10  -  FHLB  ADVANCES
     FHLB  advances  represent  borrowings  from the FHLB of Atlanta by the Bank
pursuant  to  a  line  of  credit collateralized by a blanket lien on qualifying
loans  secured by first mortgages on 1-4 family residences.  These advances have
various  maturity  dates with interest payable monthly on maturities of one year
or less and interest payable quarterly on maturities over one year.  Total loans
of  the  Bank  pledged  to  the  FHLB  for  advances  at  December 31, 1999 were
approximately  $31  million.

     At  December  31,  1999  FHLB advances were at fixed interest rates ranging
from  5.01%  to  5.77%  with initial maturities from one to ten years.  Interest
rates  ranged  from  5.40%  to 5.77% during 1998.  The weighted-average interest
rate  on  FHLB  advances outstanding at December 31, 1999 and 1998 was 5.32% and
5.63%,  respectively.  At  December  31, 1999, advances totaling $7 million were
subject  to  one-time  call  features  at the option of the FHLB with call dates
ranging  from  April  2000  to June 2003.  Scheduled maturities of FHLB advances
subsequent  to  December  31,  1999  are $2,000,000 in 2000; $3,000,000 in 2003;
$3,000,000  in  2004;  and  $1,000,000  thereafter.

NOTE  11  -  UNUSED  LINES  OF  CREDIT
     At  December  31,  1999,  the  Bank  had  available credit of approximately
$19,000,000  with  the FHLB.  Borrowings under this arrangement can be made with
various  terms  and  repayment  schedules  and  with  fixed or variable rates of
interest.  Advances  under  this  line  would be secured by the existing blanket
lien  on  qualifying  loans secured by first mortgages on 1-4 family residences.

     At  December  31, 1999, the Bank had short-term lines of credit to purchase
unsecured  federal  funds  from unrelated banks with available balances totaling
$11,300,000.  The interest rate on any borrowings under these lines would be the
prevailing  market  rate for federal funds purchased.  These lines are available
to  be  outstanding up to ten consecutive days for general corporate purposes of
the  Bank  and  have  specified repayment deadlines after disbursement of funds.
All  of  the  lenders  have  reserved the right to withdraw these lines at their
option.

     The Company has a line of credit arrangement with a commercial bank for the
purpose of funding the loan receivables of the Finance Company.  The line, which
is  for  a total of $2.5 million, is secured by the common stock of the Bank and
bears  interest  at  the  prime  lending  rate  less  50 basis points.  The line
requires  quarterly  interest  payments and  matures in October 2001.  Under the
terms  of the line, the Company is required to meet certain covenants, including
minimum capital levels and other performance ratios.  The Company believes it is
in  compliance  with  these  covenants.  There was no outstanding balance on the
line  at  December  31,  1999  or  1998.

NOTE  12  -  INCOME  TAXES
     The  provision  for  income  taxes  for  the  years ended December 31 is as
follows:

<TABLE>
<CAPTION>

(dollars in thousands)   1999     1998    1997
----------------------  -------  -------  -----
<S>                     <C>      <C>      <C>
Current:
  Federal               $1,023   $1,061   $ 798
  State                     92       90      74
                        -------  -------  -----
                         1,115    1,151     872
                        -------  -------  -----
Deferred:
  Federal                 (179)    (140)     23
  State                      -        -       -
                        -------  -------  -----
                          (179)    (140)     23
                        -------  -------  -----
Total tax provision     $  936   $1,011   $ 895
                        =======  =======  =====
</TABLE>

     Income  taxes  are  different  than  tax  expense  computed by applying the
statutory  federal  tax  rate of 34% to income before income taxes.  The reasons
for  the  differences  for  years  ended  December  31  are  as  follows:

<TABLE>
<CAPTION>

(dollars in thousands)               1999     1998     1997
----------------------------------  -------  -------  ------
<S>                                 <C>      <C>      <C>
Tax expense at statutory rate       $1,137   $  988   $ 840
State tax, net of federal benefit       61       59      49
Change in valuation allowance for
 deferred tax assets                   (13)     (10)     (3)
Effect of tax exempt interest         (192)     (75)    (37)
Other, net                             (57)      49      46
                                    -------  -------  ------
Total                               $  936   $1,011   $ 895
                                    =======  =======  ======
</TABLE>

     The  sources  and  tax  effects  of temporary differences that give rise to
significant  portions of the deferred tax assets and deferred tax liabilities at
December  31  were  as  follows:

<TABLE>
<CAPTION>

 (dollars in thousands)                                     1999     1998
---------------------------------------------------------  -------  ------
<S>                                                        <C>      <C>
Deferred tax assets:
  Allowance for loan losses deferred for tax purposes      $  700   $ 586
  Book depreciation and amortization in excess of tax          90      71
  Unrealized net losses on securities available for sale      345       -
  Other                                                        33      34
                                                           -------  ------
          Gross deferred tax assets                         1,168     691
          Less: valuation allowance                            (2)    (15)
                                                           -------  ------
          Net deferred tax assets                           1,166     676
                                                           -------  ------
Deferred tax liabilities:
  Net deferred loan costs                                     (15)    (22)
  Unrealized net gains on securities available for sale         -    (192)
  Compensation expense deferred for financial reporting       (82)   (109)
                                                           -------  ------
          Gross deferred tax liabilities                      (97)   (323)
                                                           -------  ------
Net deferred tax asset                                     $1,069   $ 353
                                                           =======  ======
</TABLE>

     The  net  deferred  tax  asset  is  included  in  "Other  assets"  in  the
accompanying  consolidated  balance  sheets.  A portion of the change in the net
deferred  tax  asset  relates  to  unrealized  gains  and  losses  on securities
available  for sale.  A current period deferred tax benefit of $537,000 has been
recorded directly to shareholders' equity.  The balance of the change in the net
deferred  tax  asset  results  from  the  current period deferred tax benefit of
$179,000.  The  valuation  allowance  for  deferred  income taxes relates to the
state loss carryforwards which may not be ultimately realized to reduce taxes of
the  Company.  The  decreases  in  the valuation allowance for each of the years
ended  December  31,  1999 and 1998 were based on actual earnings of the Company
for  those  years.  In management's opinion, it is more likely than not that the
results  of future operations will generate sufficient income to realize the net
deferred  tax  asset.

NOTE  13  -  CAPITAL  STOCK  AND  PER  SHARE  INFORMATION
     On November 29, 1999, the Company issued a 5% stock dividend.  The dividend
was  issued  to  all shareholders of record on November 15, 1999 and resulted in
the  issuance  of  153,822  shares  of common stock of the Company.  All average
share  and per share data have been restated to reflect the stock dividend as of
the  earliest  period  presented.

     As  of  December  31,  1999,  there were 293,802 common shares reserved for
issuance  under  stock  compensation  benefit  plans.

     The  following  is  a  reconciliation  of the denominators of the basic and
diluted per share computations for net income.  There was no required adjustment
to  the numerator from the net income reported on the accompanying statements of
income.

<TABLE>
<CAPTION>

                                            1999                    1998                    1997
                                    ---------------------  ----------------------  ----------------------
                                      Basic      Diluted      Basic      Diluted      Basic      Diluted
<S>                                <C>         <C>         <C>         <C>         <C>         <C>
Net income                         $2,408,000  $2,408,000  $1,895,000  $1,895,000  $1,575,000  $1,575,000
                                   ----------  ----------  ----------  ----------  ----------  ----------
Average shares outstanding          3,175,672   3,175,672   3,137,981   3,137,981   3,115,238   3,115,238
Effective of dilutive securities:
 Stock options                              -     517,920           -     579,610           -     327,718
 Unvested restricted stock                  -      33,340           -      44,453           -           -
                                   ----------  ----------  ----------  ----------  ----------  ----------
                                    3,175,672   3,726,932   3,137,981   3,762,044   3,115,238   3,442,956
                                   ----------  ----------  ----------  ----------  ----------  ----------
Per share amount                   $     0.76  $     0.65  $     0.60  $     0.50  $     0.50  $     0.46
                                   ==========  ==========  ==========  ==========  ==========  ==========
</TABLE>

NOTE  14  -  REGULATORY  CAPITAL  REQUIREMENTS  AND  DIVIDEND  RESTRICTIONS
     The  Company  and  the  Bank  are  subject  to  various  regulatory capital
requirements  administered  by  the  federal  banking agencies.  Failure to meet
minimum  capital  requirements  can  initiate  certain  mandatory  and  possibly
additional discretionary actions by regulators that, if undertaken, could have a
material  effect on the financial statements.  Under capital adequacy guidelines
and  the  regulatory framework for prompt corrective action, the Company and the
Bank must meet specific capital guidelines that involve quantitative measures of
the  Company's  and the Bank's assets, liabilities and certain off-balance sheet
items  as  calculated  under regulatory accounting practices.  The Company's and
the  Bank's  capital  amounts and classification are also subject to qualitative
judgments  by  the  regulators  about  components,  risk  weightings,  and other
factors.

     The  Company  and  the  Bank  are  required to maintain minimum amounts and
ratios  of total risk-based capital, Tier I capital, and Tier I leverage capital
as  set  forth  in the table following.  Management believes, as of December 31,
1999,  that  the  Company and the Bank meet all capital adequacy requirements to
which  they are subject.  At December 31, 1999 and 1998, the Bank is categorized
as  "well  capitalized"  under  the  regulatory  framework for prompt corrective
action.  There  are  no  current  conditions  or events that management believes
would  change  the  Company's  or  the  Bank's  category.

     The  following  table  presents the Company's and the Bank's actual capital
amounts  and  ratios  at  December  31,  1999  and  1998  as well as the minimum
calculated  amounts  for  each  regulatory  defined  category.

<TABLE>
<CAPTION>
                                                                               To Be
                                                            For Capital    Categorized
                                                             Adequacy         "Well
(dollars  in  thousands)                    Actual           Purposes      Capitalized"
------------------------                ---------------  ---------------  ---------------
                                        Amount   Ratio   Amount   Ratio   Amount   Ratio
                                        -------  ------  -------  ------  -------  ------
<S>                                     <C>      <C>     <C>      <C>     <C>      <C>
AS OF DECEMBER 31, 1999
The Company
--------------------------------------
Total capital to risk-weighted assets   $19,955  12.51%  $12,765   8.00%        N.A.
Tier 1 capital to risk-weighted assets  $17,960  11.26%  $ 6,383   4.00%        N.A.
Tier 1 capital to average assets        $17,960   9.97%  $ 7,206   4.00%        N.A.
The Bank
--------------------------------------
Total capital to risk-weighted assets   $17,907  11.37%  $12,596   8.00%  $15,745  10.00%
Tier 1 capital to risk-weighted assets  $15,995  10.16%  $ 6,298   4.00%  $ 9,447   6.00%
Tier 1 capital to average assets        $15,995   9.00%  $ 7,111   4.00%  $ 8,890   5.00%

AS OF DECEMBER 31, 1998
The Company
--------------------------------------
Total capital to risk-weighted assets   $16,846  12.16%  $11,083   8.00%        N.A.
Tier 1 capital to risk-weighted assets  $15,114  10.91%  $ 5,541   4.00%        N.A.
Tier 1 capital to average assets        $15,114   9.08%  $ 6,657   4.00%        N.A.
The Bank
--------------------------------------
Total capital to risk-weighted assets   $15,126  11.12%  $10,878   8.00%  $13,597  10.00%
Tier 1 capital to risk-weighted assets  $13,520   9.94%  $ 5,438   4.00%  $ 8,158   6.00%
Tier 1 capital to average assets        $13,520   8.25%  $ 6,556   4.00%  $ 8,196   5.00%
</TABLE>

     The  ability  of  the  Company  to  pay  cash  dividends  is dependent upon
receiving  cash  in the form of dividends from the Bank.  The dividends that may
be  paid  by  the  Bank  to  the  Company  are  subject to legal limitations and
regulatory  capital  requirements.  The  approval  of  the  Comptroller  of  the
Currency  is  required if the total of all dividends declared by a national bank
in  any  calendar  year  exceeds  the  Bank's  net  profits  (as  defined by the
Comptroller) for that year combined with its retained net profits (as defined by
the Comptroller) for the two preceding calendar years.  As of December 31, 1999,
no  cash  dividends  have  been  declared  or  paid by the Bank and the Bank had
available  retained  earnings  of  $7.5  million.

NOTE  15  -  OTHER  INCOME  AND  OTHER  EXPENSES
     The  components  of  other operating income for the years ended December 31
are  as  follows:

<TABLE>
<CAPTION>

(dollars in thousands)                1999   1998   1997
------------------------------------  -----  -----  -----
<S>                                   <C>    <C>    <C>
Late charges and other loan fees      $ 235  $ 215  $ 180
Nondeposit product sales commission     148    177    104
Other                                   316    228    116
                                      -----  -----  -----
                                      $ 699  $ 620  $ 400
                                      =====  =====  =====
</TABLE>

     The  components of other operating expenses for the years ended December 31
are  as  follows:

<TABLE>
<CAPTION>

(dollars in thousands)                     1999    1998    1997
----------------------------------------  ------  ------  ------
<S>                                       <C>     <C>     <C>
Advertising and public relations          $  251  $  200  $  256
Stationary, printing and office support      314     324     317
Credit card service expense                  277     231     194
Legal and professional fees                  311     239     203
Amortization of intangibles                  157     157     154
Other                                        500     469     410
                                          ------  ------  ------
                                          $1,810  $1,620  $1,534
                                          ======  ======  ======
</TABLE>

NOTE  16  -  STOCK  COMPENSATION  PLANS
     The  Company  has  a  Restricted  Stock  Plan  for  awards  to  certain key
employees.  Under  the Restricted Stock Plan, the Company may grant common stock
to  its  employees  for  up  to  268,018  shares.  All  shares granted under the
Restricted  Stock  Plan  are subject to restrictions as to continuous employment
for  a  specified  time period following the date of grant.  During this period,
the holder is entitled to full voting rights and dividends.  The restrictions as
to  transferability  of  shares  granted under this plan vest over a period of 5
years  at  a rate of 20% on each anniversary date of the grant.  At December 31,
1999,  there  were  55,566  shares  of  restricted  stock outstanding.  Deferred
compensation  representing  the  difference between the fair market value of the
stock  at  the date of grant and the cash paid for the stock is amortized over a
five-year  vesting  period  as  the  restrictions  lapse.  Included  in  the
accompanying  consolidated  statements  of  income  under the caption "Salaries,
wages  and  benefits" is $101,000 of amortized deferred compensation for each of
the  years  ended  December  31,  1999  and  1998.

     The  Company has two Incentive Stock Option Plans (one approved in 1989 and
one  in  1999) and a Non-Employee Stock Option Plan (collectively referred to as
stock-based  option plans).  Under the Incentive Stock Option Plans, options are
periodically granted to employees at a price not less than the fair market value
of  the  shares  at  the  date  of grant.  Options granted are exercisable for a
period  of  ten years from the date of grant and become exercisable at a rate of
20%  each  year  on  the  first  five  anniversaries  of the date of grant.  The
Incentive  Stock  Option  Plans  authorize the granting of stock options up to a
maximum of 912,307 shares of common stock.  At December 31, 1999, 208,700 option
shares  were  available  to  be  granted  under  these  plans.

     Under  the  Non-Employee Stock Option Plan, options have been granted, at a
price not less than the fair market value of the shares at the date of grant, to
eligible  non-employee  directors as a retainer for their services as directors.
Options  granted  are  exercisable  for  a  period of ten years from the date of
grant.  Options granted on January 1, 1995 became exercisable one year after the
date  of  grant.  Options  granted  on January 1, 1996 become exercisable over a
period  of nine years at a rate of 11.1% on each of the first nine anniversaries
of  the  date  of  grant.  The  Non-Employee  Stock  Option  Plan authorizes the
granting of stock options up to a maximum of 335,024 shares of common stock.  At
December  31, 1999, 16,591 option shares were available to be granted under this
plan.

     The  following  is  a  summary of the activity under the stock-based option
plans  for  the  years  ended  December  31,  1999,  1998  and  1997:

<TABLE>
<CAPTION>

                                1999                  1998                 1997
                           -----------------   ------------------   ------------------
                                    Weighted             Weighted             Weighted
                                     Average              Average              Average
                                    Exercise             Exercise             Exercise
                           Shares     Price     Shares     Price     Shares     Price
                          --------  ---------  --------  ---------  --------  ---------
<S>                       <C>       <C>        <C>       <C>        <C>       <C>
Outstanding, January 1    973,027   $    5.55  957,435   $    5.12  937,582   $    4.95
Granted                    16,080   $   13.40   50,800   $   14.10   60,427   $    6.83
Canceled                  (27,971)  $    7.53  (16,126)  $    8.14  (13,443)  $    6.23
Exercised                 (53,323)  $    3.84  (19,082)  $    4.70  (27,131)  $    2.68
                          --------  ---------  -------   ---------  -------   ---------
Outstanding, December 31  907,813   $    5.73  973,027   $    5.55  957,435   $    5.12
                          ========  =========  ========  =========  ========  =========
Exercisable, December 31  599,527   $    4.87  497,832   $    4.35  429,553   $    4.10
                          ========  =========  ========  =========  ========  =========
</TABLE>

     The  following table summarizes information about stock options outstanding
under  the  stock-based  option  plans  at  December  31,  1999:

<TABLE>
<CAPTION>

                           OPTIONS OUTSTANDING             OPTIONS EXERCISABLE
                      --------------------------------     -------------------
                                  Weighted
                                   Average    Weighted                Weighted
                      Number      Remaining    Average     Number      Average
Range of Exercise     Options    Contractual  Exercise     Options    Exercise
Prices:             Outstanding     Life        Price    Exercisable    Price
------------------  -----------  -----------  ---------  -----------  ---------
<S>                 <C>          <C>          <C>        <C>          <C>
2.37  -  $3.05         150,732    1.2 years  $    2.63      150,732  $    2.63
3.64  -  $4.38         176,062    4.8 years  $    4.36      176,062  $    4.36
5.88                   291,265    6.0 years  $    5.88      134,092  $    5.88
6.38 - $6.48           224,832    7.0 years  $    6.48      127,021  $    6.48
8.75 - $13.83           23,252    8.9 years  $   11.22        4,410  $    9.49
14.51 - $14.76          41,670    8.4 years  $   14.55        7,210  $   14.51
                      --------    ---------  ---------     --------  ---------
2.37  - $14.76         907,813    5.4 years  $    5.73      599,527  $    4.87
                      ========    =========  =========     ========  =========
</TABLE>

     The  Company  follows  APB  25 to account for its stock-based option plans.
Accordingly, no compensation cost has been recognized for the stock-based option
plans.  Had compensation cost for the Company's incentive and non-employee stock
option  plans  been  determined  based  on  the fair value at the grant date for
awards  in  1999, 1998, and 1997 consistent with the provisions of SFAS 123, the
Company's net earnings and diluted earnings per share would have been reduced to
the  proforma  amounts  as  follows:

<TABLE>
<CAPTION>

(dollars, except per share, in thousands)   1999    1998    1997
-----------------------------------------  ------  ------  ------
<S>                                        <C>     <C>     <C>
Net income - as reported                   $2,408  $1,895  $1,575
Net income - proforma                      $2,167  $1,705  $1,436
Diluted earnings per share - as reported   $ 0.65  $ 0.50  $ 0.46
Diluted earnings per share - proforma      $ 0.58  $ 0.45  $ 0.42
</TABLE>

     The  weighted-average  fair  value per share of options granted in 1999 and
1998  amounted  to $7.64 and $8.34, respectively.  Fair values were estimated on
the  date  of  grant  using  the  Black-Scholes  option-pricing  model  with the
following  assumptions used for grants: expected volatility of 79.5%, 49.1%, and
26.5%  for  1999, 1998 and 1997, respectively; risk-free interest rate of 6.00%,
4.54%,  and  5.70% for 1999, 1998, and 1997, respectively; and expected lives of
the  options  of  4.6  years,  7.5  years, and 6 years for 1999, 1998, and 1997.
There  were  no  cash  dividends  in  any  year.

NOTE  17  -  EMPLOYEE  BENEFIT  PLANS
     The  Company  maintains an employee benefit plan for all eligible employees
of  the  Company  and  its subsidiaries under the provisions of Internal Revenue
Code  Section  401K.  The Summit Retirement Savings Plan (the "Plan") allows for
employee  contributions and, upon annual approval of the Board of Directors, the
Company  matches  employee  contributions  from  one percent to a maximum of six
percent  of  deferred  compensation.  The matching contributions as a percent of
deferred  compensation  were  6% for 1999 and 1998, and 4% for 1997.  A total of
$113,000,  $106,000,  and  $61,000,  respectively,  in  1999, 1998, and 1997 was
charged  to  operations  for the Company's matching contribution.  Employees are
immediately vested in their contributions to the Plan and become fully vested in
the  employer  matching  contribution  after  five  years  of  service.

     During  1998,  Summit  National  Bank  entered  into  salary  continuation
agreements  with  several  key  management  employees, all of whom are officers.
Under the agreements, the Bank is obligated to provide for each such employee or
his  beneficiaries,  during  a  period  of  20 years after the employee's death,
disability,  or  retirement,  annual  benefits ranging from $38,000 to $113,000.
The  estimated present value of future benefits to be paid is being accrued over
the  period  from  the  effective  date  of  the  agreements  until the expected
retirement  dates  of the participants.  The expense incurred and amount accrued
for  this  nonqualified salary continuation plan, which is an unfunded plan, for
the  years  ended  December  31,  1999 and 1998 amounted to $52,000 and $49,000,
respectfully.  To partially finance benefits under this plan, the Bank purchased
and  is the beneficiary of life insurance policies.  Proceeds from the insurance
policies are payable to the Company upon the death of the participant.  The cash
surrender  value  of  these  policies  included in the accompanying consolidated
balance  sheets  in "Other assets" was $1,831,000 and $1,754,000 at December 31,
1999  and  1998,  respectively.

NOTE  18  -  CONTINGENT  LIABILITIES
     In  the  normal  course  of  business, the Company and its subsidiaries are
periodically  subject  to various pending or threatened lawsuits in which claims
for  monetary  damages  may  be  asserted.  In  the  opinion  of  the  Company's
management,  after  consultation  with  legal  counsel,  none of this litigation
should  have  a  material  adverse  effect  on the Company's financial position.

NOTE  19  -  FINANCIAL  INSTRUMENTS  WITH  OFF-BALANCE  SHEET  RISK
     The  Company  is party to financial instruments with off-balance sheet risk
in  the  normal course of business to meet the financing needs of its customers.
These  financial  instruments  include  commitments to extend credit and standby
letters  of  credit  and  involve,  to  varying  degrees, elements of credit and
interest rate risk in excess of the amount recognized in the balance sheet.  The
Company's  exposure  to  credit loss in the event of nonperformance by the other
party  to  the financial instrument for commitments to extend credit and standby
letters  of  credit  is  represented  by  the  contractual  amounts  of  those
instruments.

     The  Company  uses  the  same  credit  and  collateral  policies  in making
commitments  and  conditional  obligations  as  it  does  for  on-balance  sheet
instruments.  The  Company  evaluates  each  customer's  creditworthiness  on  a
case-by-case  basis.  The  amount  of collateral obtained if deemed necessary by
the Company upon extension of credit is based on management's credit evaluation.
Commitments  to  extend  credit  are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have  fixed  expiration  dates  or  other termination clauses and may
require  payment  of  a  fee.  Since  many of the commitments may expire without
being  drawn  upon,  the  total  commitment amounts do not necessarily represent
future  cash  requirements.

     At December 31, 1999 the Company's commitments to extend additional credit,
including obligations under the Company's revolving credit card program, totaled
approximately  $46,908,000,  of  which  approximately  $5,870,000  represents
commitments  to extend credit at fixed rates of interest.  Commitments to extend
credit  at  fixed rates expose the Company to some degree of interest rate risk.
Included  in  the  Company's  total  commitments  are standby letters of credit.
Letters  of  credit  are  commitments  issued  by  the  Company to guarantee the
performance  of  a  customer to a third party and totaled $4,829,000 at December
31,  1999.  The credit risk involved in the underwriting of letters of credit is
essentially the same as that involved in extending loan facilities to customers.

NOTE  20  -  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
     SFAS 107, "Disclosures about Fair Value of Financial Instruments", requires
disclosure of fair value information, whether or not recognized in the statement
of  financial position, when it is practicable to estimate fair value.  SFAS 107
defines  a financial instrument as cash, evidence of an ownership interest in an
entity,  or  contractual obligations which require the exchange of cash or other
financial  instruments.  Certain  items  are  specifically  excluded  from  the
disclosure  requirements,  including  the  Company's  common stock, premises and
equipment,  and  other  assets  and  liabilities.

     Fair  value approximates book value for the following financial instruments
due  to  the  short-term  nature  of  the  instrument:  cash and due from banks,
interest-bearing deposits in banks, federal funds sold, federal funds purchased,
repurchase  agreements,  short-term  FHLB  advances,  and  other  short-term
borrowings.  Fair  value  of  investment securities is estimated based on quoted
market  prices where available.  If quoted market prices are not available, fair
values  are  based  on  quoted  market  prices  of  comparable  instruments.

     Fair  value  for  variable rate loans that reprice frequently and for loans
that  mature in less that one year is based on the carrying value, reduced by an
estimate  of  credit losses inherent in the portfolio.  Fair value of fixed rate
real  estate,  consumer,  commercial  and other loans maturing after one year is
based  on  the  discounted  present  value  of  the estimated future cash flows,
reduced  by  an  estimate  of credit losses inherent in the portfolio.  Discount
rates  used  in  these  computations approximate the rates currently offered for
similar  loans  of  comparable  terms  and  credit  quality.

     Fair  value  for demand deposit accounts and variable rate interest-bearing
accounts  with  no  fixed  maturity  date  is  equal  to  the  carrying  value.
Certificate  of  deposit  accounts  maturing  during  2000  are  valued at their
carrying  value.  Certificate  of  deposit  accounts  maturing  after  2000  are
estimated  by  discounting  cash  flows  from  expected maturities using current
interest  rates  on similar instruments.  Fair value for long-term FHLB advances
is  based  on  discounted  cash  flows  using  the  current  market  rate.

     The estimated fair market value of commitments to extend credit and standby
letters  of  credit  are  equal to their carrying value as the majority of these
off-balance  sheet  instruments  have relatively short terms to maturity and are
written  with  variable  rates  of  interest.

     The Company has used management's best estimate of fair values based on the
above assumptions.  Thus, the fair values presented may not be the amounts which
could  be  realized  in  an  immediate sale or settlement of the instrument.  In
addition,  any income tax or other expenses which would be incurred in an actual
sale  or  settlement  are  not  taken  into  consideration  in  the  fair values
presented.

     The  estimated  fair  values  of the Company's financial instruments are as
follows:

<TABLE>
<CAPTION>

(dollars in thousands)                            1999                    1998
----------------------                    ---------------------   ----------------------
                                          Carrying    Estimated   Carrying    Estimated
                                           Amount    Fair Value    Amount    Fair Value
                                          ---------  -----------  ---------  -----------
<S>                                       <C>        <C>          <C>        <C>
Financial Assets:
Cash and due from banks                   $   3,952  $     3,952  $   5,377  $     5,377
Interest-bearing bank balances                4,399        4,399        623          623
Federal funds sold                            1,470        1,470        400          400
Investment securities available for sale     26,466       26,466     27,102       27,102
Loans, net                                  146,007      143,840    128,842      133,856
Financial Liabilities:
Deposits                                    157,996      158,646    140,243      139,905
Federal funds purchased and
 repurchase agreements                        4,000        4,000      3,566        3,566
Other short-term borrowings                     500          500        820          820
FHLB advances                                 9,000        9,100      8,000        7,884
</TABLE>


NOTE  21  -  QUARTERLY  FINANCIAL  DATA  (UNAUDITED)
     Consolidated  quarterly  operating  data for the years ended December 31 is
summarized  as  follows  (per  share data has been restated to reflect the stock
split  and  all  distributions  issued):

<TABLE>
<CAPTION>

(dollars  in  thousands,  except
 per share data)                                        1999                                        1998
----------------                     -----------------------------------------    ----------------------------------------
                                       First     Second      Third     Fourth      First     Second      Third     Fourth
                                      Quarter    Quarter    Quarter    Quarter    Quarter    Quarter    Quarter    Quarter
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
<S>                                  <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Interest income                      $  3,565   $  3,690   $  3,991   $  4,131   $  3,550   $  3,588   $  3,691   $  3,587
Interest expense                       (1,520)    (1,584)    (1,737)    (1,787)    (1,687)    (1,732)    (1,747)    (1,636)
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net interest income                     2,045      2,106      2,254      2,344      1,863      1,856      1,944      1,951
Provision for loan losses                 (81)      (129)      (108)      (127)       (50)       (51)       (40)      (149)
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net interest income after
  provision for loan losses             1,964      1,977      2,146      2,217      1,813      1,805      1,904      1,802
Noninterest income                        394        390        369        407        383        384        339        302
Noninterest expenses                   (1,563)    (1,550)    (1,661)    (1,746)    (1,545)    (1,465)    (1,459)    (1,357)
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Income before income taxes                795        817        854        878        651        724        784        747
Income taxes                             (228)      (235)      (237)      (236)      (236)      (269)      (284)      (222)
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net income                                567        582        617        642        415        455        500        525
Unrealized net holding (loss)
  gain on securities, net of taxes
  and reclassification of gains in
  net income                             (190)      (312)      (218)      (156)        38          7        163         15
                                     ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Comprehensive income                 $    377   $    270   $    399   $    486   $    453   $    462   $    663   $    540
                                     =========  =========  =========  =========  =========  =========  =========  =========
NET INCOME PER SHARE:
   Basic                             $   0.18   $   0.19   $   0.19   $   0.20   $   0.13   $   0.14   $   0.16   $   0.17
   Diluted                           $   0.15   $   0.16   $   0.17   $   0.17   $   0.11   $   0.12   $   0.13   $   0.14
AVERAGE COMMON SHARES
 OUTSTANDING:
   Basic                                3,163      3,167      3,171      3,197      3,131      3,136      3,139      3,144
   Diluted                              3,771      3,775      3,722      3,726      3,731      3,784      3,786      3,769
</TABLE>


NOTE  22  -  SEGMENT  INFORMATION
     The  Company reports information about its operating segments in accordance
with  SFAS  131,  "Disclosures  about  Segments  of  an  Enterprise  and Related
Information".  Summit  Financial  Corporation  is the parent holding company for
Summit National Bank ("Bank"), a nationally chartered bank, and Freedom Finance,
Inc.  ("Finance"),  a  consumer  finance  company.  Through its bank subsidiary,
which  commenced  operations  in July 1990, the Company provides a full range of
banking  services,  including  offering demand and time deposits, commercial and
consumer  loans,  and  nondeposit  investment  services.  The Bank currently has
three  full-service branches in Greenville, South Carolina.  The Finance Company
commenced  operations  in November 1994 and makes and services small, short-term
installment  loans and related credit insurance products to individuals from its
eleven offices throughout South Carolina. The Company considers the Bank and the
Finance  Company  separate  business  segments.  Financial  performance for each
segment is detailed in the following tables.  Included in the "Corporate" column
are  amounts  for  general corporate activities and eliminations of intersegment
transactions.

<TABLE>
<CAPTION>

 (dollars in thousands)        Bank      Finance    Corporate     Total
---------------------------  ---------  ---------  -----------  ---------
<S>                          <C>        <C>        <C>          <C>
AT AND FOR THE YEAR ENDED
 DECEMBER 31, 1999
Interest income              $ 13,761   $  1,713         ($97)  $ 15,377
Interest expense               (6,594)      (284)         250     (6,628)
                             ---------  ---------  -----------  ---------
Net interest income             7,167      1,429          153      8,749
Provision for loan losses        (265)      (180)           -       (445)
Noninterest income              1,262        346          (48)     1,560
Noninterest expenses           (4,998)    (1,512)         (10)    (6,520)
                             ---------  ---------  -----------  ---------
Income before income taxes      3,166         83           95      3,344
Income taxes                     (874)       (29)         (33)      (936)
                             ---------  ---------  -----------  ---------
Net income                   $  2,292   $     54   $       62   $  2,408
                             =========  =========  ===========  =========
Net loans                    $144,285   $  2,932      ($1,210)  $146,007
                             =========  =========  ===========  =========
Total assets                 $188,769   $  3,748      ($1,288)  $191,229
                             =========  =========  ===========  =========
</TABLE>


<TABLE>
<CAPTION>

(dollars in thousands)         Bank      Finance    Corporate     Total
---------------------------  ---------  ---------  -----------  ---------
<S>                          <C>        <C>        <C>          <C>
AT AND FOR THE YEAR ENDED
 DECEMBER 31, 1998
Interest income              $ 12,912   $  1,577         ($73)  $ 14,416
Interest expense               (6,731)      (286)         215     (6,802)
                             ---------  ---------  -----------  ---------
Net interest income             6,181      1,291          142      7,614
Provision for loan losses        (146)      (144)           -       (290)
Noninterest income              1,156        300          (48)     1,408
Noninterest expenses           (4,260)    (1,550)         (16)    (5,826)
                             ---------  ---------  -----------  ---------
Income before income taxes      2,931       (103)          78      2,906
Income taxes                   (1,020)        35          (26)    (1,011)
                             ---------  ---------  -----------  ---------
Net income                   $  1,911       ($68)  $       52   $  1,895
                             =========  =========  ===========  =========
Net loans                    $127,327   $  2,660      ($1,145)  $128,842
                             =========  =========  ===========  =========
Total assets                 $168,072   $  3,634      ($1,221)  $170,485
                             =========  =========  ===========  =========
</TABLE>


<TABLE>
<CAPTION>

(dollars in thousands)         Bank      Finance    Corporate     Total
---------------------------  ---------  ---------  -----------  ---------
<S>                          <C>        <C>        <C>          <C>
AT AND FOR THE YEAR ENDED
 DECEMBER 31, 1997
Interest income              $ 11,858   $  1,614         ($91)  $ 13,381
Interest expense               (6,352)      (304)         252     (6,404)
                             ---------  ---------  -----------  ---------
Net interest income             5,506      1,310          161      6,977
Provision for loan losses        (216)      (176)           -       (392)
Noninterest income                780        303          (48)     1,035
Noninterest expenses           (3,589)    (1,569)           8     (5,150)
                             ---------  ---------  -----------  ---------
Income before income taxes      2,481       (132)         121      2,470
Income taxes                     (900)        45          (40)      (895)
                             ---------  ---------  -----------  ---------
Net income                   $  1,581       ($87)  $       81   $  1,575
                             =========  =========  ===========  =========
Net loans                    $115,548   $  2,579      ($1,100)  $117,027
                             =========  =========  ===========  =========
Total assets                 $157,701   $  3,698      ($1,120)  $160,279
                             =========  =========  ===========  =========
</TABLE>


NOTE  23  -  PARENT  COMPANY  FINANCIAL  INFORMATION
     The  following  is  condensed  financial  information  of  Summit Financial
Corporation  (parent  company  only)  at  December 31, 1999 and 1998 and for the
years  ended  December  31,  1999,  1998  and  1997.

<TABLE>
<CAPTION>

                          SUMMIT FINANCIAL CORPORATION
                            CONDENSED BALANCE SHEETS

                                          December 31,
                                       ----------------
(dollars in thousands)                  1999      1998
-------------------------------------  -------  --------
<S>                                    <C>      <C>
ASSETS
Cash                                   $   267  $   154
Investment in bank subsidiary           15,432   14,016
Investment in nonbank subsidiary            53       (1)
Due from subsidiaries                    1,879    1,864
Other assets                                 -        2
                                       -------  --------
                                       $17,631  $16,035
                                       =======  ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accruals and other liabilities         $    40  $    38
Due to subsidiaries                          -        3
Other borrowings                             -      320
Shareholders' equity                    17,591   15,674
                                       -------  --------
                                       $17,631  $16,035
                                       =======  ========
</TABLE>


<TABLE>
<CAPTION>

                          SUMMIT FINANCIAL CORPORATION
                         CONDENSED STATEMENTS OF INCOME

                              For the Years Ended December 31,
                              --------------------------------
(dollars in thousands)                1999     1998     1997
-----------------------------------  -------  -------  -------
<S>                                  <C>      <C>      <C>
Interest income                      $  153   $  176   $  175
Interest expense                         (1)     (33)     (13)
                                     -------  -------  -------
Net interest income                     152      143      162
Noninterest expenses                    (57)     (65)     (40)
                                     -------  -------  -------
Net operating income                     95       78      122
Equity in undistributed net income
 of subsidiaries                      2,346    1,843    1,493
                                     -------  -------  -------
Income before taxes                   2,441    1,921    1,615
Income taxes                            (33)     (26)     (40)
                                     -------  -------  -------
Net income                           $2,408   $1,895   $1,575
                                     =======  =======  =======
</TABLE>


<TABLE>
<CAPTION>

                            SUMMIT FINANCIAL CORPORATION
                         CONDENSED STATEMENTS OF CASH FLOWS

                                                    For the Years Ended December 31,
                                                    --------------------------------
(dollars in thousands)                                    1999      1998      1997
------------------------------------------------------  --------  --------  --------
<S>                                                     <C>       <C>       <C>
Operating activities:
Net income                                              $ 2,408   $ 1,895   $ 1,575
Adjustments to reconcile net income to net cash
  provided by operating activities:
Equity in undistributed net income of subsidiaries       (2,346)   (1,843)   (1,493)
Decrease in other assets                                      2         1         -
Increase (decrease) in other liabilities                      2        (9)       19
Amortization of deferred compensation                       101       101         -
Deferred taxes                                                -         -         2
                                                        --------  --------  --------
     Net cash provided by operating activities              167       145       103
                                                        --------  --------  --------
INVESTING ACTIVITIES:
Net (increase) decrease in due from subsidiary              (15)       66      (129)
Net (decrease) increase in due to subsidiary                 (3)        3         -
Capital contribution to bank subsidiary                       -         -      (500)
     Net cash (used) provided by investing activities       (18)       69      (629)
                                                        --------  --------  --------
FINANCING ACTIVITIES:
Proceeds from notes payable                                   -         -       500
Repayments of notes payable                                (320)     (180)      (50)
Employee stock options exercised                            286        88        72
Cash paid in lieu of fractional shares                       (2)       (2)       (5)
     Net cash (used) provided by financing activities       (36)      (94)      517
                                                        --------  --------  --------
Net change in cash and cash equivalents                     113       120        (9)
Balance, beginning of year                                  154        34        43
                                                        --------  --------  --------
Balance, end of year                                    $   267   $   154   $    34
                                                        ========  ========  ========
</TABLE>

<PAGE>

                          INDEPENDENT AUDITORS' REPORT


The  Board  of  Directors
Summit  Financial  Corporation


     We  have  audited  the  accompanying  consolidated balance sheets of Summit
Financial  Corporation  and subsidiaries (the "Company") as of December 31, 1999
and  1998,  and  the  related  consolidated  statements of income, shareholders'
equity  and  comprehensive  income  and  cash flows for each of the years in the
three-year  period  ended  December  31,  1999.  These  consolidated  financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based  on  our  audits.

     We  conducted  our  audits  in  accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing  the  accounting  principles  used  and  significant estimates made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that  our  audits  provide  a  reasonable  basis  for  our opinion.

     In  our  opinion,  the  consolidated financial statements referred to above
present  fairly,  in  all  material  respects,  the financial position of Summit
Financial Corporation and subsidiaries as of December 31, 1999 and 1998, and the
results  of  their  operations and their cash flows for each of the years in the
three-year period ended December 31, 1999, in conformity with generally accepted
accounting  principles.



    /s/  KPMG  LLP

Greenville,  South  Carolina
January  18,  2000

<PAGE>


ITEM  9.     CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DISCLOSURES

     There  has  been  no  changes  in  or  disagreements  with  accountants  on
accounting  and  financial  disclosure as defined by Item 304 of Regulation S-K.


                                    PART III

ITEM  10.     DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

     The  information required by this item is set forth in the definitive Proxy
Statement of the Company filed in connection with its 2000 Annual Meeting of the
Shareholders,  which information is incorporated herein by reference as follows:
     (a)  Identification  of  Directors:  Page  4  of  the  2000 Proxy Statement
     (b)  Identification  of  Executive  Officers:  Page  7  of  the  2000 Proxy
Statement
     (c)  Identification  of  Certain  Significant  Employees:  NONE
     (d)  Family  Relationships:  NONE
     (e)  Business  experience:  Pages  5-7  of  the  2000  Proxy  Statement
     (f)  Involvement  in  Certain  Legal  Proceedings:  NONE
     (g)  Promoters  and  Control  Persons:  NONE

ITEM  11.     EXECUTIVE  COMPENSATION

     The  information required by this item is set forth in the definitive Proxy
Statement  of  the  Company  filed in connection with its 2000 Annual Meeting of
Shareholders,  which information is incorporated herein by reference as follows:

     (a)  -  (f)  Executive  Compensation  tables:  Pages  7-8 of the 2000 Proxy
Statement
     (g)  Compensation  of  Directors:  Page  3  of  the  2000  Proxy  Statement
     (h)  Employment  Contracts:  Page  9  of  the  2000  Proxy  Statement
     (i)  Repricing  of  Options/SARs:  NONE
     (j) Compensation Committee Interlocks:  Page 11 of the 2000 Proxy Statement
     (k) Compensation Committee Report:  Pages 10-11 of the 2000 Proxy Statement
     (l)  Performance  Graph:  Page  12  of  the  2000  Proxy  Statement

ITEM  12.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT

     The  information  required  by  this  item  is  set forth under the heading
"Election  of  Directors"  on pages 4-5 in the definitive Proxy Statement of the
Company  filed in connection with its 2000 Annual Meeting of Shareholders, which
information  is  incorporated  herein  by  reference.

ITEM  13.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The  information  required  by  this  item  is  set forth under the heading
"Compensation  Committee  Interlocks  and  Insider Participation" on page 11 and
"Certain  Transactions"  on  page  14  in  the definitive Proxy Statement of the
Company  filed in connection with its 2000 Annual Meeting of Shareholders, which
information  is  incorporated  herein  by  reference.


<PAGE>
                                     PART IV

ITEM  14.     EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  &  REPORTS ON FORM 8-K

     (a)     List  of  documents  filed  as  a  part  of  this  report:

     1.  Financial  Statements:

          The  following  consolidated  financial  statements  and  report  of
independent  auditors  of  the  Company  are  included in Part I, Item 8 hereof:

     Consolidated  Balance  Sheets  as  of  December  31,  1999  and  1998
     Consolidated  Statements  of  Income  For The Years Ended December 31,
        1999,  1998,  1997
     Consolidated  Statements  of  Shareholders'  Equity  And Comprehensive
        Income  For  The  Years  Ended  December  31,  1999,  1998,  and  1997
     Consolidated Statements of Cash Flows For The Years Ended December 31,
        1999,  1998,  1997
     Notes  to  Consolidated  Financial  Statements
     Report  of  Independent  Auditors

     2.  Financial  Statement  Schedules:

All other consolidated financial statements or schedules have been omitted since
the required information is included in the consolidated financial statements or
notes thereto referenced in Item 14(a)1 above, or is not applicable or required.

     3.  Exhibits  (numbered  in  accordance  with  Item 601 of Regulation S-K):

     3.1     Articles of Incorporation, as amended (incorporated by reference to
exhibits  filed  with  the Registrant's Registration Statement on Form S-1 Under
The  Securities  Act of 1933, as filed with the SEC on October 6, 1989, File No.
33-31466).

     3.2     Bylaws,  as  amended  (incorporated  by reference to exhibits filed
with  the  Registrant's  Registration  Statement  on Amendment No. 1 To Form S-1
Under  The  Securities  Act  of 1933, as filed with the SEC on December 7, 1989,
File  No.  33-31466).

     4.     Form  of  Certificate for Common Stock (incorporated by reference to
exhibits  filed  with the Registrant's Registration Statement on Amendment No. 1
To  Form S-1 Under The Securities Act of 1933, as filed with the SEC on December
7,  1989,  File  No.  33-31466).

     10.1     Summit Financial Corporation Incentive Stock Plan (incorporated by
reference to exhibits filed with the Registrant's Registration Statement on Form
S-1  Under The Securities Act of 1933, as filed with the SEC on October 6, 1989,
File  No.  33-31466).

     10.2     Lease  Agreement  for  Bank  Site  (incorporated  by  reference to
exhibits  filed  with  the Registrant's Registration Statement on Form S-1 Under
The  Securities  Act of 1933, as filed with the SEC on October 6, 1989, File No.
33-31466).

     10.3     Employment Agreement of J. Randolph Potter dated December 21, 1998
(incorporated by reference to exhibits filed with Summit Financial Corporation's
Annual  Report  to  the  Securities and Exchange Commission on Form 10-K for the
year  ended  December  31,  1998,  File  No.  000-19235).

     10.4     Employment  Agreement  of  Blaise B. Bettendorf dated December 21,
1998  (incorporated  by  reference  to  exhibits  filed  with  Summit  Financial
Corporation's  Annual  Report  to the Securities and Exchange Commission on Form
10-K  for  the  year  ended  December  31,  1998,  File  No.  000-19235).

     10.5     Summit  Financial  Corporation Restricted Stock Plan (incorporated
by reference to exhibits filed with Summit Financial Corporation's Annual Report
to  the  Securities  and  Exchange  Commission  on  Form 10-K for the year ended
December  31,  1993,  File  No.  000-19235).

     10.6     Summit  Financial  Corporation  Non-Employee  Stock  Option  Plan
(incorporated by reference to exhibits filed with Summit Financial Corporation's
Annual  Report  to  the  Securities and Exchange Commission on Form 10-K for the
year  ended  December  31,  1994,  File  No.  000-19235).

     10.7     Employment Agreement of James B. Schwiers dated September 2, 1999.

     10.8     Summit  Financial  Corporation  1999  Incentive  Stock  Plan.

     21     Subsidiaries  of  Summit  Financial  Corporation:
                    Summit  National  Bank,  a  nationally  chartered  bank.
                    Freedom  Finance,  Inc.,  a  consumer  finance  company.

     23     Consent  of  KPMG LLP with regard to S-8 Registration Statements for
Summit Financial Corporation Restricted Stock Plan (as filed with the Securities
and  Exchange  Commission,  "SEC",  August  23, 1994, File No. 33-83538); Summit
Financial  Corporation  Incentive  Stock Option Plan (as filed with the SEC July
19, 1995, File No. 33-94962); and Summit Financial Corporation 1995 Non-Employee
Stock  Option  Plan  (as  filed  with the SEC July 19, 1995, File No. 33-94964).

     27     Financial  data  schedule

NOTE:  The  exhibits  listed above will be furnished to any security holder upon
written  request  to  Ms.  Blaise B. Bettendorf, Chief Financial Officer, Summit
Financial  Corporation,  Post Office Box 1087, Greenville, South Carolina 29602.
The Registrant will charge a fee of $.25 per page for photocopying such exhibit.


     (b)     No  reports  on  Form  8-K  were filed by the Registrant during the
fourth  quarter  of  1999.

     (c)     Exhibits required to be filed with this report, which have not been
previously  filed  as indicated in Item 14(a) above, are submitted as a separate
section  of  this  report.

     (d)     Not  applicable.

<PAGE>


                                   SIGNATURES

     Pursuant  to  the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its  behalf  by  the  undersigned,  thereunto  duly  authorized,  in the City of
Greenville,  South  Carolina,  on  the  20nd  day  of  March,  2000.

                              SUMMIT  FINANCIAL  CORPORATION
                                /s/  J.  Randolph  Potter
                              ---------------------------
Dated:  March  20,  2000      J.  Randolph  Potter,  President

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
Registrant  and  in  the  capacities  and  on  the  dates  indicated.

<TABLE>
<CAPTION>


SIGNATURE                              TITLE                  DATE
<S>                          <C>                         <C>
  /s/ J. Randolph Potter     President, Chief Executive  March 20, 2000
---------------------------  Officer and Director
J. Randolph Potter

  /s/ Blaise B. Bettendorf   Senior Vice President       March 20, 2000
---------------------------  (Principal Financial and
Blaise B. Bettendorf          Accounting Officer)

  /s/ C. Vincent Brown       Chairman                    March 20, 2000
---------------------------
C. Vincent Brown

 /s/ John A. Kuhne           Vice Chairman               March 20, 2000
---------------------------
John A. Kuhne

  /s/ David C. Poole         Secretary                   March 20, 2000
---------------------------
David C. Poole

  /s/ Ivan E. Block          Director                    March 20, 2000
---------------------------
Ivan E. Block

  /s/ J. Earle Furman, Jr.   Director                    March 20, 2000
---------------------------
J. Earle Furman, Jr.

 /s/ Charles S. Houser       Director                    March 20, 2000
---------------------------
Charles S. Houser

 /s/ John W. Houser          Director                    March 20, 2000
---------------------------
John W. Houser

 /s/ T. Wayne McDonald       Director                    March 20, 2000
---------------------------
T. Wayne McDonald

  /s/ Larry A. McKinney      Director                    March 20, 2000
---------------------------
Larry A. McKinney

  /s/ George O. Short, Jr.   Director                    March 20, 2000
---------------------------
George O. Short, Jr.
</TABLE>